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Thursday, 6 December, 2001, 22:18 GMT
Mixed signs from US economy
The floor of the New York Stock Exchange
Investors are more upbeat about prospects for the US economy
Figures showing a big fall in the number of Americans receiving unemployment benefits and a rise in factory orders have raised hopes that the US economy could be heading for a swift recovery.

But other data suggested the outlook for the economy was not clear-cut, with worker productivity growing at a slower rate than expected.

And a study of US retailers found the weakest sales growth for November since the recession of 1990.

On Wall Street, the main Dow index of leading shares ended down 15 points at 10,099.

The Dow has posted big gains in recent days on hopes the US economy can pull out of recession relatively quickly, and on Wednesday it finished above the 10,000 level for the first time since early September.

Positive news

The US Labor Department said the number of Americans receiving unemployment benefit dropped by 349,000 in late November, the biggest fall since January 1983.

And the number of new applications for benefits fell by 18,000 last week, the fifth fall in the past six weeks.

Meanwhile the jump in factory orders was the biggest gain since June last year, and the first rise since May.

Much of the increase was down to a big increase in orders for military aircraft, which rose to more than $15bn in October from $2.6bn the previous month.

Productivity slows

But another set of figures suggested the US economy still has some way to go before it can be said to have entered a sustained recovery.

New figures showed that productivity in the US grew by a much slower rate than expected during the three months to the end of September.

The data showed that US productivity - or worker output of goods and services per hour - in the non-farming sectors grew at a rate of only 1.5% during this quarter.

This was a downward revision from the original estimate of 2.7%, and was much worse than analysts' forecasts which had been predicting a figure nearer 2.1%.

Retailers see poor sales growth

Meanwhile a survey of US retailers showed sales growing at a far lower rate than expected last month.

An index of same-store data from 77 US retailers by Bank of Tokyo Mitsubishi, found sales grew by only 2% in November, after a 4% lift in October.

Once again discount retailers tended to do better than other stores, but even Wal-Mart's growth figure of 4.3% was at the lower end of expectations.

There was more bad news from the clothes retailer Gap, which said sales in stores open at least a year fell 25% last month, and said its fourth-quarter losses would be "considerably worse" than the previous quarter.


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See also:

05 Dec 01 | Business
Shares blaze upwards
26 Nov 01 | Business
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07 Aug 01 | Business
Surprise surge in US productivity
25 Jul 01 | Business
Global jobs and shares gloom
27 Jun 01 | Business
Fed opts for 'smaller' rate cut
14 Mar 01 | Business
Can Bush avert recession?
17 Jan 01 | Business
US recession could be short-lived
22 Dec 00 | Americas
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