The Week Ahead

Business Week Index

THE WEEK AHEAD

EMPLOYMENT COST INDEX

Tuesday, Jan. 27, 8:30 a.m. EST -- Employment costs for civilian workers

probably increased 0.8% in the fourth quarter, the same gain posted in the

third period, according to the median forecast of economists surveyed by MMS

International, one of The McGraw-Hill Companies. The small advance would mean

that compensation costs rose 3% in 1997, just slightly above the 2.9% growth in

1996. However, if the monthly data on hourly wages are any guide, the wage and

salary component of the ECI may have increased by at least 1% last quarter,

even as benefit costs remained tame. That would push the overall ECI higher.

With labor markets tight, compensation costs are likely to post bigger gains in

1998, putting the squeeze on profit margins.

CONSUMER CONFIDENCE

Tuesday, Jan. 27, 10 a.m. EST -- The Conference Board's index of consumer

confidence probably slipped to 132 in January, after jumping more than six

points in December, to 134.5.

DURABLE GOODS ORDERS

Wednesday, Jan. 28, 8:30 a.m.EST -- Durable goods orders likely fell 2.3% in

December, says the MMS forecast. In November, new bookings unexpectedly jumped

4.8%, led by an increase in airplane orders. Excluding aircraft, demand for

durable goods dropped in both October and November.

REAL GROSS DOMESTIC PRODUCT

Friday, Jan. 30 8:30 a.m. EST -- The median MMS forecast projects that real

gross domestic product grew at an annual rate of 3.5% in the fourth quarter,

after a 3.1% advance in the third period. If so, then the economy grew at a

robust 3.7% pace for all of 1997. Consumer spending increased moderately last

quarter, while foreign trade and housing most likely added some muscle to

fourth-quarter output. Inflation, as measured by the GDP price index, probably

stood at an annual rate of 1.6% in the fourth quarter, up from 1.4% in the

third.