BUREAU OF LABOR STATISTICS, DAILY REPORT, FRIDAY, FEBRUARY 8, 2002: With each passing week, new economic figures add support to the view that the U.S. economy is turning around, according to many economists, more and more of whom now expect growth at a 1 to 3 percent annual rate in the current quarter. Yesterday, for instance, the Labor Department reported that initial claims for unemployment benefits fell to 376,000 last week, bringing the more important 4-week moving average for claims down to 389,500 -- about the same level as when the recession began 10 months ago. "Job declines are growing smaller, and the number of companies adding workers is growing larger," said economist L. Douglas Lee, of Economics From Washington, Inc. "Since labor markets typically lag behind other parts of the economy by about 6 months, these signs of stability are emerging quite early in the current cycle," Lee added. Nonfarm payroll employment did fall by 89,000 last month, but even that number was seen as a positive sign because it was the smallest decline since August, just before the September 11 terrorist attacks temporarily knocked the props from under both business and consumer confidence. Much of last month's loss in payroll jobs came in manufacturing, as has generally been the case since the recession began. But even in that hard-hit sector of the economy, things are looking up. The Institute for Supply Management's index that tracks conditions in manufacturing rose to 49.9 last month from 48.1` in December. (John M. Berry, The Washington Post, page E1).
Data from newly negotiated contract agreements compiled by the Bureau of National Affairs through February 4, 2002, show that the average first-year wage increase was 3.8 percent, compared with 3.7 percent in the comparable period of 2001. The median first-year increase for the same settlements was 3.5 percent, and the weighted average increase was 2.3 percent. Among nonmanufacturing (excluding construction) settlements, the average increase was 4.4 percent, while manufacturing contracts posted an average increase of 1.6 percent (Daily Labor Report, page D-4). Deep discounting of winter merchandise drew consumers into stores in January, offering many struggling retailers a brief respite from a recent spate of sluggish sales (Associated Press, The New York Times page C10; The Wall Street Journal, page B4).
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