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To: SecularBull who wrote (84770)	12/10/1998 4:35:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 176387

Calling Lee,need help, hello you there? Lod: True but manufacturing only represents a lesser % of GDP as a whole where as consumer segment represents more than 2/3rd of the GDP.I think we can ask Lee for the exact % she knows this type of information by heart. Anyway right now it seems the layoffs in manufacturing is being absorbed by the other sectors of the economy.However you do have a point.

To: SecularBull who wrote (84770)	12/10/1998 9:13:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 176387

<U.S Economy> One man's opinion. LoD: Here is a rather interesting look at what we have been talking about with respect to GDP,employment in manufacturing sector etc. ============================================================= (courtesy:The Dismal Scientist) Consumer Strength Offsets Faltering Manufacturing, Sunken Exports and Investment Weakness Analysis by Gary L. Ciminero, Independent Economic Advisory Posted December 10, 1998 A strong 3.4% rise in consumption will bolster the current quarter. Together with continued strength in housing that had October starts and new home sales approaching their respective year highs, the consumer will carry the day against plunging foreign trade and faltering business investment. This will likely push real growth in GDP to a 2.7% trend this quarter, following last quarter's 3.9% revised rise. Accordingly, the US consumer will power the economy forward beyond the Holiday season, perhaps postponing the onset of a "growth recession" until late next quarter. But since the consumption spree is nonsustaintable, I still expect real outlays to slow toward 1% by the second quarter. As the Asian crisis increasingly saps export strength and pushes in imports, our foreign trade sector also will descend well through next year. The lessening global crisis will nevertheless continue to steal pricing power and business, hence profits, from US-based producers. These negatives also undercut production, capacity use, and factory employment. Their combined effects will keep US business investment on a slow- or no-growth path well into next year as well. As consumption resumes faster growth by the second half, GDP will also be aided by a smaller drag from falling foreign trade and a bottoming-out in business investment. This implies that the aftermath of the "growth recession" in the first half will have growth increasing only moderately, to about 2% during the second half vs. the 0.7% trend of the first six months. With commodity prices deflating, product and consumer inflation only inching up, and labor costs rising, the profit recession will continue for the next two quarters before beginning to turn around. This would cut after-tax profits about 2.5% this year followed by a mere 1.3% recovery in 1999. During the tricky period that lies ahead, I hope that the US stock market will continue to turn a blind eye toward the profit recession and ignore the 4.6% decline in S&P-500 earnings that is underway this year. The last thing our spendthrift consumer needs is another scary stock market correction. That could derail consumer spending and with it both the US economic engine and the long train of troubled economies that it is pulling. The risk is that the "growth recession" I foresee, commencing after the turn of the year, could degenerate into a nasty full-fledged downturn, if US consumers flag in their spending zeal. For, a strong US consumer is the linchpin securing the US economy from recession. Strong consumption spending is critical to keeping us out of recession and stimulating troubled world economies with our demand for their exports.