> BUREAU OF LABOR STATISTICS, DAILY REPORT, JULY 10, 2001:
>
> Economists overwhelmingly predict that the U.S. economy will avoid
> slumping into a recession, but they say the business climate during the
> second quarter was the worst they have seen since the 1990-1991 recession,
> according to the National Association for Business Economics's quarterly
> industry survey of 135 economists (Daily Labor Report, page A-3).
>
> When the Business Cycle Dating Committee of the National Bureau of
> Economic Research (NBER) meets to officially decide on the month that an
> economic expansion has ended, the six economists usually sit down to a
> meal. The "rookie member" of this committee, Princeton University
> economists Ben Bernanke, does not expect to get that "free French dinner"
> anytime soon. While the economic data is "quite ambiguous," Professor
> Bernanke sees no "screaming" evidence of a recession today. Most
> economists agree. In fact, they expect the economy to recover from its
> current slowdown in a few months. But if the slump should deepen to the
> point where national output actually shrinks for a while, it would end the
> record 10-year-old expansion and Bernanke would get his meal (Davis R.
> Francis, The Christian Science Monitor,
> http://www.csmonitor.com/durable/2001/07/09/p21s1.htm).
>
> On Friday, the Labor Department released employment data for June. The
> employment report is the most important monthly statistical release the
> government produces and the focus is always on the unemployment rate and
> the monthly change in payroll employment. But there is a little secret in
> the employment report that you should know about. The Labor Department
> said payroll employment fell 114,000 in June. What it did not tell you is
> that this reported change includes a "bias adjustment factor" that adds
> about 160,000 jobs a month. This bias factor is basically picked out of
> thin air, and is supposed to capture employment in newly started firms
> that Labor misses in its survey. In other words, Labor doesn't know how
> many new hires occurred at new companies, so it assumes a number. In its
> June report, it continued to guess that it missed 155,000 new hires. The
> problem is, that when the economy slumps, so do new business start-ups. A
> good indicator of new business starts is the Conference Board's index of
> help-wanted advertising. This index has plummeted back to levels last
> seen at the end of the 1990 recession. Back then, the bias factor also
> fell to zero, instead of hanging at the same level as in the boom period
> of 1998. Compare the published payroll survey with another measure of
> employment, the Labor Department's household survey, which measures
> employment by asking a survey of people, not businesses, if they have lost
> their job. The household survey is used to calculate the unemployment
> rate, but is otherwise ignored because it is very volatile from month to
> month. Over the past 5 months this survey shows a fall in employment of
> more than one million. Over the same 5 months the published payroll
> survey has fallen only 45,000. However, if you remove the monthly
> addition of 155,000 from the bias factor, payroll employment would be down
> 269,000 in June and 872,000 over the past 5 months. Now we're talking big
> numbers. The $64 question now is whether it reflects "good news" that
> companies are adjusting quickly and cutting costs, or "bad" news that the
> economy is in a recession, says Lincoln Anderson, chief investment officer
> of LPL Financial Services in Boston. (The Wall Street Journal's editorial
> page, page A18).
>
> Wage and benefit increases negotiated in the first year of new
> construction-industry bargaining agreements in 2001 have averaged $1.54
> per hour, or 5 percent, according to data compiled by the industry-backed
> Construction Labor Research Council. The figures compare with $1.23 per
> hour, or 4.1 percent negotiated for the comparable period a year ago
> (Daily Labor Report, page A-8).
>
> The percentage of women holding executive-management posts in the 500 top
> U.S. companies rose to 5.1 percent in 1999 from 2.4 percent in 1996, says
> an International Labor Organization survey. Other Western nations
> generally have registered even lower rates, such as Australia, with 1.3
> percent ("Work Week" feature, The Wall Street Journal, page A1).
>
> Consumers, worried about their jobs in the face of layoffs, were a bit
> tight-fisted in May, borrowing money at the slowest pace in 19 months
> (Associated Press, The Wall Street Journal, page A2; The New York Times,
> page C7).
>
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