The Week Ahead


Tuesday, Feb. 9, 10 a.m. EST -- Output per hour worked in the nonfarm business sector probably grew at a spectacular annual rate of 3.5% in the fourth quarter. That's the median forecast of economists surveyed by Standard & Poor's MMS, a division of The McGraw-Hill Companies. The highest forecast calls for a 5% surge. Productivity advanced at a 3% pace in the third quarter. In the fourth quarter, only a modest increase in hours worked was needed to produce a jump in output in the nonfarm, nonhousing economy. The median productivity forecast about matches the expected increase in total compensation, suggesting that unit labor costs did not grow in the fourth quarter. For all of 1998, nonfarm productivity likely climbed by about 2.5%, the biggest annual increase in six years.


Thursday, Feb. 11, 8:30 a.m. EST -- The S&P MMS survey expects that retail sales edged up only 0.2% in January, after retailers posted a 0.9% jump in December receipts. Warm weather in early December enabled shoppers to get to shopping malls and restaurants, but it hurt sales of winter apparel. In addition, dealer incentives boosted purchases of motor vehicles by 2.6% in December. Real consumer spending increased a large 0.7% in December. But in January, car buying probably slowed, and nonauto sales likely rose 0.4%, the same gain posted in December.


Friday, Feb. 12, 8:30 a.m. EST -- Inventories stored up by manufacturers, wholesalers, and retailers probably increased by 0.2% in December, half their advance in November. For the entire fourth quarter, the Commerce Dept. calculated that inventory accumulation slowed from its third-quarter pace. That was one of the few drags on real gross domestic product growth at the end of 1998. Business sales probably increased 0.4% in December, the same modest rise posted in November. Retail sales led the gain.

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