For Manufacturers, It Is The Winter Of Their Discontent

By John S. McClenahen Companies in the U.S. that cut, bend, mold, mix, and assemble things have very little to cheer about. Automakers cut payrolls by 38,000 during January, as they tried to work down inventories. Employment is off in fabricated metals, plastics, and rubber. Across the full economy, reports the U.S. Labor Dept.'s Bureau of Labor Statistics, 300,000 people joined the jobless ranks last month, raising the number of unemployed workers to nearly 6 million and pushing the jobless rate to 4.2% from December 2000's 4% rate. Manufacturing orders rose only a modest 1.1% in December, compared with a 1.9% gain in November. The business outlook index published by the Manufacturers Alliance/MAPI, Arlington, Va., is at 50%, its transition point between growth and decline. The data that will command the most attention this week are productivity and unit-labor costs, due out on Feb. 7. In the meantime, stubbornly bullish Bruce Steinberg, chief economist at Merrill Lynch & Co., New York, still insists that though "weak," the U.S. economy is not falling into a recession. He nevertheless expects the now growth-minded members of the Federal Open Markets Committee to lower the influential federal funds rate by another 50 basis points-to 5% -- when they next meet on Mar. 20.

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