February 11, 2002,
Worker productivity on the rise
Worker productivity rose at a faster-than-expected rate during the fourth quarter of 2001, the Labor Department reported, a hopeful sign that the U.S. economy may be clawing its way out of a recession.
The productivity of U.S. workers — the output of goods and services, excluding the farm sector — climbed at an annual pace of 3.5 percent in the October to December period, up from a revised increase of 1.1 percent during the third quarter. Economists had been expecting a more moderate fourth-quarter increase of 2.9 percent.
For all of last year, the non-farm productivity rate grew a slender 1.8 percent, the poorest annual performance since the 0.9 percent gain recorded in 1995. The weak 2001 productivity increase was well off the pace of the 3.3 percent gain recorded in 2000.
But with the broad economy still mired in recession, U.S. companies were cutting back on the number of hours worked during the closing quarter of 2001. Hours worked fell by 3.7 percent, the biggest drop since early in 1991.
Factory orders continue ascent
In a hopeful sign that a battered U.S. manufacturing sector may finally be shifting into a recovery mode, factory orders climbed for the second time in three months during December, advancing by 1.2 percent, the Commerce Department reported.
Following a steep 4.3 percent drop recorded in November, factory orders climbed to a level of $322.2 billion, the federal agency said, in line with economists' expectations. Driving the total higher were strong orders for military equipment and in the transportation sector. Orders for transportation equipment jumped up by 3.6 percent, helped by orders for missiles, space vehicles and parts.
Job cut pace picks up again
Ending three straight monthly drops in the pace of job cuts announced by U.S. companies, the pace of layoffs jumped up by almost a third in January, climbing 32 percent above December's level, to a total of 212,704 work force reductions.
Challenger, Gray & Christmas, an international outplacement services company that tracks job cuts nationwide, said January's pace of layoffs was the third highest month since Challenger began tracking job cuts in 1993. It marked the fourth time in the past seven months that job cuts exceeded 200,000.
The pace of job cuts last month was 50 percent higher than the 142,208 layoffs announced a year earlier in January 2001. Since the terrorist attacks on Sept. 11 jolted the American economy, the number of announced job cuts is just shy of a million, at a level of 998,699.
Pushing the January level sharply higher was the automotive sector, where Ford announced 35,000 layoffs, pushing that sector total to its highest-ever one-month level of 43,035, Challenger reported.
"It is not a coincidence that the three largest job-cut months on record have occurred since Sept. 11," said John Challenger, ceo. "Consumers are spending less, and business is spending a lot less. Until this trend reverses, companies will have to continue to find ways to contain costs because there simply is not enough money coming in."
And there could be lots more job cuts to come, Challenger added. "There have been indications from major companies that significant work force reductions may be announced in coming weeks and months. Those plans may change depending on how the economy performs, but right now it would appear that more significant job-cut months may be in store."