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To: shotski1 who wrote (2213)	7/29/2000 2:07:13 PM
From: zbyslaw owczarczyk	Read Replies (1) \| Respond to of 3891

Such spending is viewed positively by the Fed, whose ``new motto is, `In Productivity We Trust,''' said David Orr, chief economist at First Union Corp. in Charlotte. --------------- Productivity Matters Today's report suggests money is flowing where the Fed wants to see it go. Non-residential investment, which includes commercial construction and business equipment and software, rose at a 19.1 percent annual rate in the second quarter after a 21 percent gain in the first. Investment in equipment and software alone grew at a 21 percent rate after a 20.6 percent pace in the first quarter. Those were the fastest rates since that kind of investment rose at a 24.6 percent clip in the first quarter of 1998. Such spending is viewed positively by the Fed, whose ``new motto is, `In Productivity We Trust,''' said David Orr, chief economist at First Union Corp. in Charlotte. Today's report also showed a pickup in inventory building, which added almost a percentage point to the growth figure. Business inventories rose $60.3 billion at an annual rate in the second quarter compared with the $36.6 billion increase in the first quarter. That is still down from the $80.9 billion in the final quarter of 1999. Should consumer spending continue to slow and result in further increases in inventories, that may suggest ``slower production growth ahead,'' said Peter Kretzmer, an economist at Banc of America Securities in New York. bloomberg.com