The Week Ahead

PRODUCTIVITY Tuesday, Nov. 5, 10 a.m.

Output per hour of work in the U. S. nonfarm economy likely increased at a respectable annual rate of 1.3% in the third quarter. If so, that would be productivity's best performance in more than a year. In the second quarter, productivity was up by just 0.7%. But in the third quarter, output seems to have grown much faster than total hours worked in the nonfarm business sector. Manufacturing probably continued to lead the efficiency gains. In the second quarter, factory productivity grew at a healthy 3.6% annual rate. The expected gain in output per work hour plus the moderate growth in employment costs suggest that unit labor costs in the nonfarm sector rose at an annual rate of about 3.5% in the third quarter, down from the 4.2% advance in both the first and second quarters.

CAR SALES Tuesday, Nov. 5

New domestically made cars probably sold at an annual rate of just 6 million for all of October, down from 6.3 million in September. Car buying is expected to improve by the end of the month, according to economists surveyed by MMS International, a unit of McGraw-Hill Inc. In early October, however, sales were a disastrous 5.5 million. Plus, the sharp fall in consumer confidence last month suggests that few households were in a car-buying mood. The expected selling rate for October would push sales to their lowest since April.


Consumers probably cut an additional $1 billion off their installment debt in September, say the MMS economists. In August, credit dropped $1.3 billion--the fourth consecutive decline. Auto credit was probably little changed in September, but it has been falling since March, 1990. Revolving credit may post a decline in September, the first since January. That's suggested by September's sluggish retail sales outside of car buying and a sharp drop in personal loans at commercial banks.