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The Week Ahead


Business Week Index

THE WEEK AHEAD

PRODUCTIVITY AND COSTS

Tuesday, Nov. 7, 10 a.m. -- Output per hour worked probably rose at a strong

annual rate of 2.5% in the third quarter. Output in the nonfarm sector likely

rose strongly, as suggested by the 4.2% advance in the real gross domestic

product, while hours worked likely increased by less than 2%. Nonfarm

productivity surged at a 4.8% annual rate in the second quarter. Greater

efficiency, along with the mild rise in compensation, indicates that unit labor

costs probably increased at a 0.5% pace last quarter. Labor costs fell at a

1.1% pace in the second quarter and stood no higher than they were in the

second quarter of 1994. That lack of cost pressures at nonfarm businesses is

why inflation has been so low in this expansion. Productivity has been greatest

among manufacturers.

INSTALLMENT CREDIT

Tuesday, Nov. 7, 3 p.m. -- Consumers probably took on $8.6 billion more in

credit than they paid off in September. That's the median forecast of

economists surveyed by MMS International, one of The McGraw-Hill Companies. The

growth in debt has slowed a bit during the summer, after exploding in the first

half of the year. In August, credit rose $9.1 billion, compared with the nearly

$12 billion averaged in the second quarter. The slowdown reflects weaker car

sales as well as the fact that some households are beginning to bump up against

their credit limits. Nationally, installment debt as a percent of disposable

income stood at a high 18.8% in August.

PRODUCER PRICE INDEX

Thursday, Nov. 9, 8:30 a.m. -- The MMS survey forecasts that producer prices of

finished goods likely rose by just 0.1% in October, after a 0.3% increase in

September. Prices, excluding the volatile food and energy sectors, also are

expected to post an October rise of 0.1%, on top of a 0.2% increase. Inflation

at the producer level is almost nonexistent. Prices are rising at less than 2%

for all items, and 2.1% excluding food and energy.


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