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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Karin who wrote (12300)	3/7/2000 4:29:00 PM
From: Beobe	Respond to of 15132

"People voting for those "nitwits" got us into the predicament we are in today.-" Then god bless the nitwits! Bob

To: Karin who wrote (12300)	3/7/2000 4:41:00 PM
From: Jeffrey D	Respond to of 15132

Productivity news. Jeff library.northernlight.com << Productivity Surges in 4th Quarter -------------------------------------------------------------------------------- Story Filed: Tuesday, March 07, 2000 3:53 PM EST WASHINGTON (AP) -- A key to economic prosperity that helps keep inflation in check took its biggest leap in seven years, rising at a 6.4 percent rate at the end of 1999. But the surge in American workers' productivity didn't change economists' predictions of higher interest rates in the coming months. Productivity -- the amount of output for each hour of work -- was even stronger than the government previously estimated for the fourth quarter and exceeded the stellar 5 percent annual rate of growth posted in the third quarter, the Labor Department said Tuesday. Economists consider healthy productivity gains the key to economic vitality and rising living standards. Sizable gains means companies can pay employees more, hold the line on prices and still deliver increased profits to shareholders. Computers, satellites and other technological advances are credited with helping to boost workers' efficiency. ``Our economy remains in balance and workers are reaping the benefits of the sustained productivity growth,' said Labor Secretary Alexis Herman. But Wall Street investors appeared to brush off the good news on productivity. The Dow Jones stock average, focusing instead on a steep drop in Procter & Gamble, plunged more than 400 points at one point in afternoon trading. Fears of higher interest rates also rattled investors a bit. The Nasdaq index, which briefly soared above the 5,000 mark for the first time, before losing ground and trading down about 65 points on the day. In another report, Americans rang up an unexpectedly large $17 billion in consumer debt in January, the largest monthly increase since November 1995, the Federal Reserve said. With plentiful jobs and rising incomes, consumers are feeling wealthy and in the mood to spend, economists said. The surge reflected heavy credit card use and robust borrowing for everything from cars to vacations. The new fourth-quarter productivity figure -- in line with many analysts' expectations -- was revised upward from a previous estimate of a 5 percent rate and marked the biggest leap in productivity growth since the end of 1992 when it rose at a 7.4 percent rate. ``The productivity of the American worker apparently knows no bounds,' said economist Joel Naroff of Naroff Economic Advisors. At the same time, unit labor costs -- a key barometer of underlying inflation pressures -- fell by a bigger-than-expected 2.5 percent rate in the fourth quarter, the steepest drop in seven years. That means the costs of producing a particular piece of merchandise fell. It also suggests that companies are under less pressure to raise prices to cover these costs, economists said. Unit labor costs are closely watched by economists because the bulk of U.S. companies' expenses involve paying for wages, benefits and other labor-related items. The drop in fourth-quarter unit labor costs was even sharper than the government previously estimated and followed a 0.3 percent rate of decline in the third quarter. Even with Tuesday's report showing strong productivity gains coupled with falling unit labor costs, many economists didn't believe it would deter the Federal Reserve from bumping up interest rates several more times this year. The central bank has raised interest rates four times since June to slow the red-hot economy and keep inflation under control. But economists said those actions have yet to rein in the economy, which grew at a breakneck 6.9 percent rate in the fourth quarter. ``The latest productivity report should relieve inflation anxieties,' said Merrill Lynch economist Stan Shipley. ``Nevertheless, we expect that the Fed will tighten' at its next two meetings on March 21 and on May 16. Tim O'Neill, chief economist for the Bank of Montreal and Harris Bank, said that while he expects a March 21 rate increase the report gives the central bank some wiggle room in deciding when to do the next one. ``While the productivity growth numbers do imply that whatever inflation pressures might develop from the strong head of steam the economy has, they are going to develop fairly slowly,' O'Neill said. ``So the report gives the Fed more room to maneuver here.' After booming in the 1950s and 1960s, productivity went into a two-decade slump following the first Arab oil embargo in 1973. The recent upturn in productivity since 1996 has left some analysts believing that huge business investments in computers are finally beginning to pay off and the country is in a new economic era that will be marked by stronger productivity gains. If productivity falters, however, pressures for higher wages could force companies to raise their prices sharply, thus triggering inflation. Fed Chairman Alan Greenspan said Monday he saw no signs that the solid gains in productivity growth will peter out soon. But he expressed new worries about an overheated economy and sounded a warning that interest rates will be raised if the economy doesn't slow. On the Net: The Labor Department's productivity report: stats.bls.gov:80/datahome.htm