RELEASED TODAY: The Employment Cost Index (not seasonally adjusted) for December 2001 was 156.8 (June 1989=100), an increase of 4.1 percent from December 2000, the Bureau of Labor Statistics reported today. The Employment Cost Index (ECI), a component of the Bureau's National Compensation Survey, measures changes in compensation costs, which includes wages, salaries, and employer costs for employee benefits.
U.S. economic growth turned positive in the last three months of 2001, increasing a slight 0.2 percent on very strong consumer and federal spending, the Commerce Department says. Americans responded to the zero-percent auto financing, which helped lift consumer spending 5.4 percent, while government outlays, both military and nondefense, shot up 9.5 percent ( Daily Labor Report, page D-1). The number of large-scale layoffs soared in New England and the Midwest during December, despite a decline in such events in the U.S. as a whole, according to the Bureau of Labor Statistics. The federal agency tracks so-called mass layoffs, in which 50 or more employees lose their jobs in a single action from a company. New England had 116 such events in December, a 53% increase from the month before, resulting in 12,809 initial claims for unemployment insurance, a 45% jump. And in the Midwest, mass layoffs increased by 28% to 1,013 in December, resulting in 119,250 initial unemployment claims, up 18%. But nationally such large-scale job-cutting actions dropped 9% in December, to 2,425. The largest was in Pacific Coast states--a 44% decrease from November. Lewis Siegel, senior economist at the agency, says the Midwest layoffs were driven by auto-related manufacturers, even as car companies saw a boom in sales because of 0%-financing offers. No industry dominated in New England, though Mr. Siegel notes smaller sectors related to communications and computer equipment had high numbers of layoffs. Mr. Siegel notes, however, that month-to-month comparisons are difficult as the data aren't seasonally adjusted ( The Wall Street Journal, January 30, Andrew Caffey, page B9). Against the backdrop of an economy that is displaying remarkable resilience, the Federal Reserve brought its yearlong campaign of interest rate cuts to an apparent end today, voting to hold rates steady and citing signs of an incipient recovery. The decision by the central bank was announced a few hours after the Commerce Department reported that the economy had defied widespread predictions of a sharp contraction after the terrorist attacks to show a small growth in the last three months of the year. The department said the economy expanded at an annual rate of 0.2 percent in October , November and December, driven in large part by robust consumer spending, especially on new cars. In the previous quarter, the economy contracted at a 1.3 percent annual rate ( The New York Times, page A1). The numbers point to economic recovery. Powered by soaring auto sales and a sharp increase in government spending, the U.S. economy resumed growing in the final three months of last year, albeit at a meager 0.2 percent annual rate, the Commerce Department reported yesterday. The unexpectedly strong number, an initial estimate that will be revised in coming months, suggests that the U.S. recession that began last spring may have already ended. If so, it will have been the mildest on record ( The Washington Post, page A1). DUE OUT TOMORROW: The Employment Situation: January 2002
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