Reported by Star-Bulletin staff & wire
Thursday, September 3, 1998
Fed official sees more trouble on horizon
BOISE, Idaho -- Spending by consumers and businesses will probably slow because of weaker stock prices and stronger headwinds from slumping global economies that "must be taken seriously," said San Francisco Fed Bank President Robert Parry.The U.S. economy is still characterized by strong demand for labor, robust consumer spending and new home buying, and firm business investment in new buildings and equipment, Parry said in the text of a speech to a community leaders luncheon in Boise.
Still, "there's even more uncertainty with the recent turbulence in financial markets in Russia, Latin America, and some other countries," Parry said. His comments suggest he sees a greater threat to the U.S. economy from the global slowdown, though they don't reflect a sense of urgency for the Fed to respond with an immediate cut in interest rates.
U.S. productivity slows; August retail sales fall
WASHINGTON -- Growth in American workers' productivity -- the key to rising living standards -- slowed in the April through June quarter, posting the smallest gain in nearly two years.Separately, the nation's chain stores today reported weak sales for August, with the decline mostly blamed on a late Labor Day holiday but also attributed to signs of slowing consumer spending.
Productivity of nonfarm, nonsupervisory workers -- measured as output per hour of work -- rose at 0.1 percent annual rate, the Labor Department said today. That's better than advance figures, released last month, which speculated that productivity had actually fallen 0.2 percent in the second quarter. But it's still the worst showing since the third quarter of 1996, when productivity was unchanged.
In other news . . .
TOKYO -- Toa Steel Co. said it would go out of business in March, making the steelmaker the biggest Japanese manufacturer to fail since World War II. Toa suffered from slumping sales as demand for its housing materials died amid a construction slowdown.
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