> BUREAU OF LABOR STATISTICS, FRIDAY, JUNE 22, 2001:
>
> The trade deficit in goods and services narrowed 2.7 percent in April as
> the global economic slowdown reduced both imports and exports, the
> Commerce Department reports. The improvements in the April trade
> imbalance came about as total imports fell 2.2 percent and exports fell 2
> percent (Daily Labor Report, page D-1; The Washington Post, page E2;
> Reuters, The Wall Street Journal, page A2). Reduced demand for imported
> goods and the second consecutive monthly decline in exports underscore
> sluggish performance of the United States economy, which is spilling over
> to its trading partners. "This is just another sign of a weakening
> economy," said a senior economist at CIBC World Markets Inc. in Toronto.
> "When trade is falling in both directions, that is a sign that both
> domestic and foreign demand are falling." (The New York Times, page C6).
>
> Industrial production is plunging and layoffs are soaring. The National
> Bureau of Economic Research, the official arbiter of business cycles, says
> a recession may have already begun. If so, the first recession of this
> century is different from every other downturn of the last 50 years. That
> difference can be seen in the housing market, which is going along just
> fine, thank you. The National Association of Home Builders said this week
> that its housing index is up from a year ago and about double what it was
> in the last recession, in the early 1990's. By post-World War II
> standards, this is a backward economic cycle. A normal recession is
> preceded by inflation, which leads the Federal Reserve to push up interest
> rates, which devastates housing, the most economically sensitive of
> industries, before the rest of the economy succumbs. None of that
> happened this time. The inflation of the recent boom was in assets, not
> consumer prices, and it led to a huge overinvestment in capital equipment
> as telecommunications companies wasted billions of dollars in laying
> thousands of miles of excess fiber optic capacity. Now the collapse of
> capital spending is leading to rising unemployment and an economic
> slowdown. Lower interest rates are the main reason housing has not
> suffered, but an expensive rental market has also encouraged renters to
> buy. Rental costs rose 4.5 percent in the 12 months ended in May, the
> highest since rental inflation peaked at 4.6 percent in September 1990, a
> few months after the last recession began. (The New York Times, page C1).
>
> The belief is growing that the United States is a nation divided into
> "haves" and "have-nots," according to survey results released yesterday by
> the Pew Research Center for the People & the Press. In the survey of
> 1,200 adults taken June 13-17, 44 percent agree America is a nation
> divided into "haves" and "have-nots". But most, 53 percent, said it was
> not. The survey report compared the result with a 1999 Gallup survey in
> which 39 percent said the United States was so divided, and a 1988 Gallup
> survey in which 26 percent gave that answer. The income gap between rich
> and poor widened in the 1980s and 1990s, reaching its widest point in
> 1997, according to a study released by the Congressional Budget Office
> last month (The Washington Post, page E2).
>
> The economic boom of the 1990s improved the financial outlook for upper
> middle class and wealthy Americans, but it had little impact on the
> outlook or financial condition of those who make less money, a new poll
> says. The number of people who think the country is divided between those
> who have enough and those who don't has grown steadily and now is at 44
> percent -- up from 26 percent in 1988. Findings from the poll indicate
> that women were more concerned about rising prices than men, four in 10
> Americans now say there are plenty of jobs available, up from one in 10
> who felt that way 8 years ago. Those from wealthy households were twice
> as likely to feel that way as those with low incomes. Blacks, Hispanics,
> and other minorities were more likely than whites to struggle with
> economic issues, even when compared with whites in the same economic range
> (Will Lester, Associated Press,
> http://www.nandotimes.com/business/story/31058p-527439c.html;
> http://www.latimes.com/wires/20010622/tCB00V0594.html).
>
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