Economic Numbers Offer Something for Everyone With AM-Employment Bjt
NEW YORK (AP) _ A spate of positive economic reports this week, including a modest drop in unemployment and a pickup in sales for retailers like Wal-Mart, looks at first like a sign that the economy is truly gaining strength.
But the reports failed to inspire much enthusiasm about the economy or alter economists’ previously held views. Mostly, the numbers were interpreted as more of the same: evidence of slow growth.
Friday’s report of a fourth straight monthly drop in the nation’s unemployment rate, to a six-month low of 7.4 percent in October, followed news from retailers Thursday of solid sales gains last month that may herald greater consumer spending over the critical holiday season.
But Markley Roberts, an economist at the AFL-CIO in Washington, said: ″It’s clear that conditions are not improving ... The economy is still in bad shape.″
Economists noted that a survey of employers included in the Labor Department report showed non-farm payrolls rose by just 27,000 jobs in October, following September’s loss of 72,000 jobs.
″President-elect Clinton certainly has his work cut out for him,″ said Nancy Kimelman, chief economist with Technical Data, a division of Thomson Financial Services. Clinton’s campaign emphasized economic recovery and increased jobs.
″We had several weeks of signs of economic improvement, but these numbers are quite disconcerting and Clinton will be pressured to take some aggressive action,″ Kimelman said.
Adding to the lackluster picture was news earlier in the week of a 0.3 percent drop in September in the government’s main economic forecasting gauge, the index of leading indicators.
Nonetheless, some economists are optimistic.
M. Ray Perryman of Perryman Consultants Inc. thinks the country is definitely in the midst of a recovery, having experienced sluggish yet steady economic growth over the past six quarters.
″I’m definitely not one of the triple dippers″ who think the economy is headed for another slump, he said, referring to the fact that the economy has already suffered two downturns since 1990.
Still, he’s not expecting any boom either. ″It’s not a recovery that’s going to have a great deal of momentum. I’m not seeing anything that tells me the next three months are going to be dramatically different from the past three months.″
Perryman predicted the economy will gradually gain steam to grow by about 3 percent in 1993 and by the same amount in 1994. The economy probably is growing at around half that rate now.
Michael Moran, chief economist of Daiwa Securities America Inc., recommends putting a positive spin on recent reports, and says ″there is an extremely low probability of sliding back into recession at this time.″
One real cause for hope, Moran said, is that the economy has been able to eke out some expansion in spite of cutbacks in government defense spending plus pressures on businesses and households to hold the line on spending.