BLS Daily Report

[Richardson_D <Richardson_D@xxxxxxx>]

> BUREAU OF LABOR STATISTICS, DAILY REPORT, FRIDAY, NOVEMBER 2, 2001:
>
> RELEASED TODAY:  Employment fell sharply in October, and the unemployment
> rate jumped to 5.4 percent, the Bureau of Labor Statistics reports.
> Nonfarm payroll employment dropped by 415,000 over the month, by far the
> largest of three consecutive monthly declines.  The job losses in October
> were spread across most industry groups, with especially large declines in
> manufacturing and services.
>  ALSO RELEASED:  Statement of Lois Orr, Acting Commissioner, Bureau of
> Labor Statistics, before the Joint Economic Committee, United States
> Congress.
>
> The nation's unemployment rate soared to 5.4 percent in October, the
> biggest one-month jump in more than 21 years, providing the most dramatic
> evidence yet that economic fallout from the terror attacks probably pushed
> the country into recession.  A massive 415,000 jobs were eliminated during
> the month.  Widespread job losses catapulted the unemployment rate from
> 4.9 percent in September to 5.4 percent last month, marking the highest
> unemployment rate the country has seen since December 1996, the Labor
> Department reports. The 415,000 jobs eliminated during the month
> represented the biggest cut in payrolls since May 1980.  Manufacturing,
> airlines, travel agencies, hotels, retailers were among those posting big
> losses.  The 0.5 percentage point advance in October's unemployment rate
> also was the biggest one-month gain since May 1980 (Jeannine Aversa,
> Associated Press,
> http://www.chicagotribune.com/business/sns-economy.story?coll-chi%2Dnews%2
> Dnews%2Dhed).
>
> Shaken by news Friday that the nation's unemployment soared to 5.4 percent
> in October, investors pushed stocks lower, locking in some of their gains
> from Thursday's big rally. The unemployment rate, which had been 4.9
> percent in September, recorded its biggest one-month jump since May 1980
> as a massive 415,000 jobs were eliminated last month, according to the
> Labor Department.  It's the highest unemployment rate since December 1996
> (Amy Baldwin, Associated Press,
> http://www.boston.com/dailynews/306/economy/Stocks_dip_Friday_on_big_jump_
> :.shtml).
>
> U.S. manufacturing activity plunged last month to the lowest level in more
> than a decade, extending the declines in production and new orders that
> intensified after the September 11 terrorist attacks, the National
> Association of Purchasing Management reported yesterday.  In sharp
> contrast, U.S. and foreign automakers said yesterday that sales of new
> cars and light trucks soared last month to a record annual rate of 21.3
> million vehicles after dropping sharply in September. Separately, the
> National Association of Manufacturers said a survey of 65 corporate chief
> executives on its board of directors found that more than 65 percent
> "expect their industry to be in recession in the fourth quarter of 2001
> through the first quarter of 2002, and another 30 percent anticipate
> growth to be less than 2 percent.  Meanwhile, the Commerce Department
> reported that personal incomes rose less than 0.1 percent in September,
> partly because of disruptions related to the attacks.  After adjustment
> for inflation, the drop in consumption spending in September was 1.3
> percent (John M. Berry, The Washington Post, page E1).
>
> One government measure shows that deflation is here, says Floyd Norris
> writing in The New York Times (page C1).  The government's quarterly
> growth report, which showed that the economy shrank in the third quarter,
> reported a decline of 0.4 percent, at an annual rate, in prices for
> personal consumption expenditures.  It was the first quarterly fall in
> nearly half a century, since the second quarter of 1954, at the end of a
> recession.  The number is calculated in a more sophisticated way than the
> more widely followed consumer price index, and it is a figure that the
> Federal Reserve watches.  Fed chairman Alan Greenspan prefers the core
> figure for personal consumption expenditures, which excludes food and
> energy.  It is still barely positive, at 0.3 percent.  What is new here is
> that deflation is spreading from the industrial world to consumers.
>
> New unemployment claims for the week ending October 27 decreased by 10,000
> from the previous week's revised figures, the Employment and Training
> Administration reports.  Initial claims dropped to 499,000 for the week,
> bringing the 4-week moving average to 497,250, a decrease of 9,000 from
> the previous week's revised average of 506,250 (Daily Labor Report, page
> D-7; The Washington Post, page E2).
>
> Personal income increased less than 0.1 percent in September, as consumer
> spending fell 1.8 percent, partly due to the September 11 terrorist
> attacks, according to figures from the Bureau of Economic Analysis. U.S.
> residents spent less and saved more in September as increases occurred in
> personal savings, according to BEA.  By September, private wage and salary
> disbursements decreased $2.7 billion, compared with a drop of $2.6 billion
> in August.  Only payrolls in service industries saw an increase ($4.1
> billion), compared with a $3.2 billion increase in August, according to
> BEA.  Wages and salaries for Federal employees increased in September by
> $4.7 billion, compared with an increase of $3.2 billion in August (Daily
> Labor Report, page D-1).
>
> Not only did the sagging manufacturing sector post another decline in
> October, but the overall U.S. economy failed to expand as well, according
> to the latest survey data from the National Association of Purchasing
> Management. The latest NAPM report fits with the projections of most
> economists for a relatively brief recession, that most likely began in the
> third quarter.  New orders for factory goods fell below 50 percent again
> in October, after showing gains in the prior 2 months (Daily Labor Report,
> page A-2).
>
> The number of employers providing retiree health care benefits is
> declining, and alternative sources of retiree coverage are either costly
> or limited, a General Accounting Office official told a House hearing
> yesterday.  William J. Scanlong, GAO's director of health care issues,
> told the House Education and the Workforce subcommitte on
> Employer-Employee Relations that despite several years of a sustained
> strong economy and relatively low increases in health insurance premiums
> during the late 1990s, the availability of employer-sponsored retiree
> health benefits has eroded. Employers are also restricting eligibility and
> increasing retiree costs (Daily Labor Report, page A-10).
>
> The U.S. auto industry recorded its best month in history, using the lure
> of no-interest loans to boost sales 24.4 percent, but risking future
> damage to the companies' bottom line.  None of the Detroit-area Big Three
> auto makers has quantified the fiscal burdens of the unprecedented
> financing deals, but industry analysts say the no-interest loans cost the
> companies about $2,500 for the median-priced $24,000 vehicle.  In
> announcing October sales, market leaders General Motors Corp. and Ford
> Motor Co. acknowledged that there will be "payback" for the generous
> financing terms, which they have extended past mid-November.  The
> manufacturers recognize that the deals, and the record sales pace, are
> unsustainable (The New York Times, page C2,
> http://www.latimes.com/business/la-000087089nov02.story?coll=la%2Dheadline
> s%2Dbusiness).
>

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