Incomes Rise 0.5 Percent In July for the Sixth Time
THE income of Americans rose 0.5 percent in July, the sixth straight increase, and easily outpaced a 0.2 percent spending rise, the government said yesterday. The Commerce Department also reported that disposable income - income after taxes - rose 0.5 percent in July. Both pretax income and disposable income had risen a mere 0.1 percent in June.
Consumer spending, which represents two-thirds of the nation's economic activity, was up for the third month in a row. But the July rise was less than the 0.5 percent advance in June and 0.6 percent gain in May. Income had last fallen in January, when it slipped 0.6 percent.
The combination of the two types of income and spending meant that Americans' savings rate - savings as a percentage of disposable income - was 4.1 percent in June, up from a revised 3.7 percent the previous month.
The July figures for spending and income were in line with analysts' expectations and appear to reflect an economy growing at a moderate pace. The economy expanded at a 3.8 percent annual rate in the second quarter of 1994. Firms see job growth continuing
JOB growth in the United States should remain steady during the fourth quarter of 1994, despite what some analysts see as signs of a slowing economy, a new survey says.
Milwaukee-based Manpower Inc., says its quarterly telephone survey of 15,000 businesses, released yesterday, shows that 26 percent plan to hire additional workers. Ten percent plan job cuts, 61 percent expect no change, and 3 percent are uncertain what will happen. Fourth-quarter hiring projections are lower than the previous two quarters but better than the fourth quarter of last year, when 22 percent of the businesses polled said they planned to add workers, and 11 percent projected cuts. Employers in the Midwest and South are more optimistic than those in the Northeast and West, the survey says.
``The nation's job machine is now producing at a continuing and steady pace, but it is still tempered by a concern for total labor costs in a very competitive pricing environment,'' says Manpower chief executive officer Mitchell Fromstein. ``This concern appears to be keeping job growth below the explosive rate historically associated with a protracted recovery.''
Merrill Lynch & Co. senior economist Bruce Steinberg says the survey results are ``consistent with what we're seeing in the economy - it continues to grow but not as rapidly as it was in the first half of the year.''
One factor slowing the economy is rising interest rates, Mr. Steinberg says. Another is uncertainty over the effect of proposed health-care reforms on businesses, says Raymond Worseck, chief economist with A.G. Edwards & Sons Inc., of St. Louis.
The survey done by Manpower, a temporary-employment agency, looks at 10 sectors of the economy. The best job growth is projected in the wholesale and retail trades, where 36 percent of companies polled say they will hire additional employees, and only 8 percent say they foresee cuts. Manpower says that sector's outlook is the most optimistic in 16 years. Executives involved in the manufacturing of durable goods - products such as computers, appliances, and automobiles - are also upbeat.
Most pessimistic is the mining sector, in which only 11 percent of companies say they expect additional hiring, while 14 percent say they plan cutbacks.