> BUREAU OF LABOR STATISTICS, DAILY REPORT, AUGUST 1, 2001:
>
> RELEASED TODAY: In June, 208 metropolitan areas recorded unemployment
> rates below the U.S. average (4.7 percent, not seasonally adjusted), and
> 112 areas registered higher rates, the Bureau of Labor Statistics reports.
> Of the seven metropolitan areas with rates below 2.0 percent, four were in
> the Midwest, and two were in New England. Ten areas had jobless rates of
> 10.0 percent or more in June, including six in California's Central Valley
> and three along the Mexican border in other states.
>
> The worse is not yet over for the U.S. labor market, and for manufacturing
> in particular, analysts said as they reviewed the most recent economic
> data and looked toward the end of this year. Private forecasters
> generally expect the civilian unemployment rate to rise steadily from the
> June level of 4.5 percent to 5 percent or somewhat higher by the end of
> this year. Many economists predict the jobless rate will hit 5.5 percent
> before the overall economic slowdown ends later this year or early next
> year. The July employment report, scheduled for release August 3, is
> expected to show a smaller decline in nonfarm payrolls than in June, when
> employers cut 114,000 jobs. The unemployment rate is expected to rise to
> 4.7 percent for July (Daily Labor Report, page D-1).
>
> Consumer spending and personal income growth remained solid in June as
> both measures improved slightly during the month, the Bureau of Economic
> Analysis reports. A strong 1.5 percent surge in expenditures on durable
> goods provided most of the momentum for the June consumer spending data,
> but spending on services also grew at its fastest rate in 3 months, rising
> 0.4 percent, BEA said. Like the gains on the expenditure side, personal
> income rose at a small, but steady, rate of 0.3 percent in June. Wage and
> salary disbursements in service industries rebounded from gains of just
> $2.2 billion at a seasonally adjusted annual rate in May to a $12.4
> billion gain in June. The sharp increase in service wages offset the
> continued declines in manufacturing and goods-producing sectors (Daily
> Labor Report, page D-3).
>
> Despite continued layoffs, consumer spending rose 0.4 percent in June --
> about double economists' expectations (The Wall Street Journal, page A2).
>
> The consumer confidence index fell 2.4 percentage points in July as
> consumers' views about the economic outlook for the second half of 2001
> dampened, the Conference Board reports (Daily Labor Report, page A-9).
>
> Consumers know the economy is bad but are spending money anyway, according
> to two reports released yesterday. And that, some economists say, could
> keep the U.S. economy from slumping further. Consumer confidence slipped
> in July, according to a survey by the Conference Board, a business
> research group. Yet in June, consumer spending rose 0.4 percent,
> according to the Commerce Department, a bigger bump than had been
> expected. A big reason for the continued strong spending is an
> unemployment rate that is quite low by historical standards -- 4.5 percent
> in June. July employment numbers will be released Friday, and economists
> generally expect a slight increase in unemployment. Other factors
> supporting consumers' inclination to keep buying are lower interest rates
> because of Federal Reserve actions this year, energy prices that have
> dropped in recent months, and tax refund checks now being mailed out (The
> Washington Post, page E1; The New York Times, page C4).
>
> Activity in the nation's manufacturing sector declined for the 12th
> consecutive month in July, according to the National Association of
> Purchasing Management. Its purchasing index fell in July to 43.6 from
> 44.7 percent in June. Analysts had been expecting a NAPM index of 44.5.
> An index above 50 signifies growth in manufacturing, while a figure below
> 50 shows contraction. Higher energy prices and manufacturers' reluctant
> to make major capital investments were reflected in the index, the head of
> the association's monthly survey said (Lisi de Bourbon, Associated Press,
> http://www.washingtonpost.com/wp-dyn/articles/A16284-2001Aug1.html;
> http://www.boston.com/dailynews/213/economy/Manufacturing_activity_slips_f
> :.shtml; http://www.nypost.com/apstories/V4021.htm;
> http://www.usatoday.com/money/economy/2001-08-01-napm.htm;
> http://www.nandotimes.com/business/story/53876p-795125c.htm).
>
> Construction starts increased 4.8 percent during June, rebounding from a
> weak result for May, in a sign that the industry is stabilizing despite
> the economic slowdown (The Wall Street Journal, page A4).
>
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