The Week Ahead
PRODUCTIVITY AND COSTS
Tuesday, Mar. 7, 8:30 a.m.EST -- Output per hour worked in the nonfarm business sector probably grew at an annual rate of 6%, says the median forecast of economists surveyed by Standard & Poor's MMS, a division of The McGraw-Hill Companies. That leap in the rate, which would be the biggest productivity advance in seven years, is suggested by the upward revision to the fourth quarter's real gross domestic product. The Commerce Dept. now says real GDP grew at a 6.9% annual rate, up from the initially reported 5.8% pace. The upward revision to productivity means that unit labor costs probably fell at a rate greater than 2%, more than the 1.1% first reported. The new forecast for productivity would mean that output per work hour rose by about 3.6% for all of 1999, the largest gain since 1992.
Tuesday, Mar. 7, 3 p.m. EST -- Consumers probably added $7.5 billion in new debt in January, says the S&P MMS forecast. That's slightly below the $8.2 billion averaged monthly in 1999, but at yearend, borrowing surged. New debt jumped by $15.8 billion in November and $11.2 billion in December. Strong consumer finances are making households feel very comfortable about taking on large quantities of debt. That's the reason credit outstanding at the end of 1999 equalled a record 20.6% of disposable income.
Wednesday, Mar. 8, 2 p.m. EST -- The Federal Reserve will release its compilation of regional economic activity. The Beige Book, prepared in advance of the policy meeting on Mar. 21, will contain information on labor shortages and wage pressures across the country.