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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (38208)	4/6/2001 11:36:42 AM
From: IQBAL LATIF	Respond to of 50167

An analysis from Dismaleconomy.. The labor market weakened sharply in March. However, gains for the first quarter indicate a slowing but not recessionary economy. The unemployment rate has been slowly ascending since last October and increased by one-tenth of a percentage point to 4.3% in March. However, it still remains quite low in historical perspective and the pool of available workers actually contracted to 10.26 million from 10.39 million in February. The very weak gain in services can be attributed to the loss of 83,000 among temporary workers, which are used in every industry. Much of the decline in temporary help employment is attributed to weaker manufacturing production. Temporary employment has declined by almost 300,000 since last April. Changes in temporary help employment are considered a leading indicator to broader changes in the labor market. Offsetting these losses were continued strong gains in health and computer and data services. Without temporary help, services rose by 87,000, more strongly than in February. Manufacturing employment declined by 81,000 in March. During the first quarter, losses totaled 270,000 jobs on top of 181,000 jobs lost during the second half of last year. The losses were broad based. In particular, declines accelerated in industrial machinery and electronic components. The only industry to post gains was aircraft manufacturing. Auto-related industries continue to shed jobs even though auto manufacturers have successfully brought down inventories and sales have exceeded expectations. This suggests that auto-related losses could reverse in coming months. The manufacturing workweek did not decline further in March, although factory overtime continued to edge down. However, a year ago, the manufacturing workweek was one hour longer. While new orders continued to decline in March, according to the NAPM index, the decline was smaller than in the prior two months suggesting that manufacturing conditions may have bottomed out in March. Retail trade employment declined by 46,000 following two months of strong gains. The quarterly average was in line with recent trends. Two industries continue to post solid gains: construction and financial services. Construction employment is being bolstered by highway construction. Financial services are benefiting from a resurgence in mortgage refinancing as interest rates have fallen. While, initially, the March employment report seems alarming, the losses seem to be concentrated in manufacturing (including temporary help services). Moreover, if manufacturing production is bottoming out now, the weakness of the March report does not imply that the employment situation will continue to deteriorate in coming months. Continued upward pressure on wages and the concentrated nature of employment weakness is not likely to lead the Fed to lower rates any more aggressively than the expected 50 basis point sometime this spring. Moreover, the impact of the 150 basis point decrease since the beginning of the year will continue to work through the economy bolstering manufacturing activity and consumer demand for big ticket items.