Hiring Key To U.S. Economic Growth

By John S. McClenahen Worries about the pace and direction of the U.S. economy are clearly keeping companies from hiring. And that could mean GDP growth substantially lower than the 3.5% that Federal Reserve Board Chairman Alan Greenspan has projected for full-year 2002. "Job gains need to be stronger than the 6,000 posted for July for consumer spending to hold up," says Bruce Steinberg, chief economist at Merrill Lynch & Co., New York. There are some encouraging statistics. For example, initial claims for unemployment insurance fell to 376,000 for the week ending Aug. 3, a decrease of 15,000 from the previous week, reports the U.S. Labor Department. And the department's four-week moving average is down to 379,000, also well below the 400,000 level that suggests a more stable job market. The next reading on job gains will be on Sept. 6, when the Labor Department is slated to release August's employment data.

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