Friday, March 02, 2001

Big picture still shows a slowdown

Manufacturing news shadows positive reports

The Associated Press

        NEW YORK — A series of economic reports released Thursday offered mixed messages about the direction of the economy.

        While construction spending rose and Americans made more money and spent even more, a survey of manufacturing activity showed that the economy contracted for the second straight month. However, the rate of decline was slower than in recent months.

        A fourth study charted a rise in first-time claims for unemployment insurance.

        “We're not slowing down as fast,” said Dan Laufenberg, chief U.S. economist for American Express Financial Advisers in Minneapolis. “But if we put all of these together, it suggests to me that the economy actually is still slow. ... I think we hit bottom in the fourth quarter.”

        • The National Association of Purchasing Management, a group of corporate purchasing executives, said its index of business activity rose to 41.9 in February from 41.2 in January.

        An index above 50 signifies growth in manufacturing, while a figure below 50 means contraction. A level below 42.7 also generally indicates a contraction in the overall economy.

        The new figure marked the seventh straight decline in the manufacturing sector.

        • The Commerce Department said spending on construction projects in January posted the biggest increase in 10 months. With mild weather, spending rose for new homes, office buildings and highways.

        • The Commerce Department also said Americans' incomes rose sharply in January, and spending shot up even more quickly as mild weather and deep discounts lured people into stores.

        But those upbeat figures were countered by a fourth report that new claims for state unemployment insurance last week rose by 39,000 to 372,000, reflecting layoffs in car manufacturing and bad weather in some parts of the country.


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