United States Economy

U.S. workers can expect the best fourth-quarter job prospects in 21 years amid strong demand from industries such as construction and clothing, the world's largest staffing services firm said in a report released today. But hiring trends are likely to slip from lofty third-quarter levels in a typical seasonal decline, Manpower Inc.'s quarterly employment outlook survey suggests. According to the survey, 29% of the more than 15,000 U.S.

Officially, the Federal Reserve Board still is worried that the U.S. economy is too strong and that higher interest rates might be needed to slow growth and subdue inflationary pressures. But financial markets seem to have a much different view of the central bank's probable next move with rates--namely, a cut rather than an increase. For U.S. consumers and businesses, the stakes are significant either way, of course.

In the world of commercial production, 1998 is shaping up as a tough year. A recession in Asia and tighter production budgets in the U.S. are taking a toll on the nation's $4.5-billion commercial production business, which is centered in Los Angeles. Faced with tougher economics, a business made up of hundreds of small production houses is consolidating. Big production companies such as publicly traded Harmony Holdings Inc.

Sobering statistics to ponder: Measured from last year's peak in the Dow Jones industrial average, which was 8,259.31 on Aug. 6, through Wednesday's close of 8,552.96, the overall price gain in those 30 blue-chip stocks works out to 3.6%. Add in dividends, and your "total return" for the 12 months is about 5.3%. You took a lot of risk to earn that slim figure--while risk-free money market funds paid about the same in that period.

The number of jobs in the United States continued to increase at a respectable pace last month, despite a growing impact from the Asian economic slump and widespread layoffs from the recent General Motors Corp. strike, the government reported Friday. The Labor Department's monthly survey showed that the economy created 66,000 jobs in July--down from a 196,000-job rise the previous month but still well above what many analysts had predicted. The unemployment rate remained at 4.

U.S. mortgage applications declined last week even as mortgage rates stayed below 7% for the eighth week in a row--the longest stretch in almost five years, the Mortgage Bankers Assn. of America said Wednesday. The MBA's mortgage applications index fell 0.5% to 407.0 in the week ended July 31, from 409.0 the previous week. The refinancing index fell 3.15 to 1278.8 last week, from 1320.2 the previous week, while the purchase index--which gauges demand for new houses--rose 1.9% to 257.

The yen's recent decline against the dollar has rattled policymakers in Washington and Tokyo, raised the threat of government intervention in currency markets and perhaps even contributed to Wall Street's recent downward spiral. Despite all the global hand-wringing, however, the fastest path to a Japanese recovery--and the boost that such a turnaround would provide for the U.S. and global economies--may in fact be to let the currency fall further, according to some analysts.

The U.S. economy was operating at a healthy pace through July, but growth showed signs of slowing as slumping exports to Asia and shortages of employees were felt across the country, the Federal Reserve Bank said Wednesday. "Despite the high level of economic activity in recent weeks, many districts noted that labor shortages, shipping bottlenecks and continued weakness in East Asia were beginning to temper growth in their regions," the Beige Book economic summary said.

A late-day rally rescued major stock indexes from another big tumble Wednesday, but continued weakness in the market overall left open the question of whether Wall Street faces a more serious decline ahead. One day after plunging 299.43 points, the Dow Jones industrial average closed up 59.47 points at 8,546.78. The Nasdaq composite index, heavy with major technology stocks, also finished with a slight gain.

It is a doomsday scenario too real for Hollywood: The financial meltdown of a little-noticed Southeast Asian country pushes Japan to the edge of collapse, bringing the rest of the industrial world down with it. To most economists, this notion of a global recession still seems highly unlikely. If minuscule unemployment and soaring consumer confidence mean anything, the U.S. economy seems a bulwark against global havoc. But Friday's report confirming an abrupt slowdown in the U.S.