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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