> BUREAU OF LABOR STATISTICS, DAILY REPORT, THURSDAY, OCTOBER 25, 2001:
>
> RELEASED TODAY: The Employment Cost Index (not seasonally adjusted) for
> September 2001 was 155.6 (June 1989=100), an increase of 4.1 percent from
> September 2000, the Bureau of Labor Statistics reports. The Employment
> Cost Index (ECI), a component of the Bureau's National Compensation
> Survey, measures changes in compensation costs, which include wages,
> salaries, and employer costs for employee benefits. The events of
> September 11 occurred during the reference period for the ECI. The
> attacks resulted in a tragic loss of lives and significant disruptions in
> the New York and Washington area economies, as well as disruptions to
> other businesses outside these directly impacted areas. A review of
> survey responses was undertaken to evaluate the impact of the situation on
> the ECI survey cooperation rates by industry and any impact of nonresponse
> on survey estimates. No unusual effects were found.
>
> The number of Americans filing new claims for unemployment benefits rose
> last week to the second-highest level in nearly a decade. Wages and
> benefits increased by 1 percent during the July-September quarter, the
> government said today. The Labor Department reported that newly laid-off
> Americans filing for unemployment benefits rose by 8,000 last week to
> 504,000, a level generally associated with recession, as the shocks from
> the September 11 terrorist attacks continued to take a toll on the U.S.
> economy. The department also reported that workers' wages and benefits
> climbed by 1 percent for the 3 months ending in September, little changed
> from a 0.9 percent rise for the 3 months ending in June. During the last
> 12 months, Americans' wages and benefits rose by 4.1 percent, down from a
> 4.3 percent rise in the 12-month period ending in September 2000.
> Analysts aid this showed that the sluggish economy is producing less
> generous compensation packages. the Federal Reserve reported this week
> that the terrorist attacks had brought activity to a virtual standstill in
> the days immediately following the September 11 tragedy and that no part
> of the country had been spared higher layoffs and weaker business activity
> (Martin Crutsinger, Associated Press,
> http://www.chicagotribune.com/business/sns-economy.story?coll=chi%2Dbusine
> ss%2Dhed).
>
> Consumer spending hasn't crumpled because of the September 11 terrorist
> attacks, as widely feared, but already weak business spending does appear
> to have fallen further because of the added uncertainties, according to
> recent economic reports (The Wall Street Journal page A2). A survey of
> conditions across the Federal Reserve's 12 districts, known as the beige
> book, found economic activity was "weak" in September and the first weeks
> of October. Retail sales, excluding autos, were slightly lower than
> pre-attack levels, "but this weakness might have already been in train,"
> the beige book said. Businesses in the Chicago district said that "by
> late September and early October, fundamental economic factors -- rising
> unemployment and falling stock prices adversely, and low inflation and
> interest rates positively -- affected retail sales more than terrorist
> fears". The beige book is used by Fed policy makers to determine their
> stance on interest rates. The tone of the book is supported by the most
> recent economic reports. Chain store sales rose 0.5 percent last week,
> their biggest weekly increase since the attacks. Automobile sales,
> meanwhile, remain on pace for one of the best months in years, spurred by
> 0% financing. But the limited information available on capital spending
> suggests further weakness since September 11. The beige book showed
> significant differences in how the country's regions have recovered from
> the attacks, if at all. (Included is a box showing district-by-district
> reports).
>
> Orders to U.S. factories for big-ticket durable goods plunged in September
> for the fourth consecutive month. In another indication of deepening
> economic woes, the number of Americans filing new claims for unemployment
> benefits rose last week to the second-highest level in nearly a decade.
> The Commerce Department said the 8.5 percent decline in orders for durable
> goods, items expected to last 3 or more years, was led by a 15.9 percent
> falloff in demand for transportation goods, a category that includes autos
> and airplanes. The drop in orders was certain to worsen the problems in
> the manufacturing sector, which has shed more than 1 million jobs since
> the spring of 2000. The economic weakness also hit the nation's housing
> market, which had been outperforming the rest of the economy. In
> September, sales of existing homes fell by 11.7 percent to a seasonally
> adjusted annual rate of 4.89 million units. Taken together, analysts said
> all the weak statistics showed the extent of the shock the economy
> received from the terrorist attacks. "For the last 3 weeks of September,
> the economy was nearly paralyzed and that was made clear in the horrendous
> slump in durable-goods orders," said Joel Naroff, head of a Holland, Pa.,
> economic consulting company (Martin Crutsinger, Associated Press,
> http://www.nypost.com/apstories/business/V8424.htm).
>
> The terrorist attacks on the World Trade Center and the Pentagon have
> triggered steep increases in insurance prices across the nation, raising
> costs for small businesses, factories, farms, homeowners and drivers, as
> well as large corporations. Far from being limited to cities and
> companies that seem most vulnerable, the rising rates are reaching into
> the quitest, most remote areas of the country. At the same time, the
> demand for insurance has soared. The increased rates stand as a vivid and
> direct example of how the attacks have raised the costs of living and
> doing business, often in ways only indirectly related to terrorism (Joseph
> B. Treaster, The New York Times, page C1).
>
> The World Trade Organization says that growth in international merchandise
> trade would slow to 2 percent in 2001, from 12 percent last year. It then
> added that the figures still might be too optimistic. The WTO said the
> last time the trade growth fell below 2 percent was in 1982, following a
> hike in oil prices. One of the biggest factors in the slowdown is the
> fall in demand for information technology products (Associated Press,
> http://www.usatoday.com/money/world/2001-10-25-wto.htm).
>
> DUE OUT TOMORROW: "Mass Layoffs in September 2001."
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