NYC-WTC_000195490

NYC 9/11 Public Portal Document

growth of about six percent per year in 2002-2005. The pace of the recovery for both profits and investment, however, will be conditional on the ability of firms to deplete excess inventories in the near-term and resume operating at iSustairiable capacity levels; In terms of overall employment, total job growth in 2001 is expected to fall below 1 percent, down from the 21^ percent rate of the past five years. Losses in manufacturing, which is slated to contract about 3 percent, will be offset by gains in the service-producing sectors (which include, in addition to services, trade and FIRE) of the economy. Job growth picks up in 2002-2005, averaging I'/i percent per year. Although rising medical costs continue to raise some concern, the softness in the labor market, combined with productivity gains of about 2*/2 percent, should help keep inflationary pressures contained at about 2‘/2 percent as well, Wagei are anticipated to grow at a sturdy 4 perbent rate on average per year in 2001-2005, which, combined with the forecast for employment growth^ implies that personal income will rise by about S'Y percent on average per year. U.S. EMPLOYMENT AND INFLATION ' At this delicate junction in the Wtakneu In th< labor markata ahould halp keep Inflationary ' business cycle, th^ forecast is not praiiuree contained throughout the forecaet period, deaplte without uncertainties and caution is recent rieee In medical prlcea and fringe benefKe. 4.0 , certainly warranted. As with all turning points the economy’s 2.5 lL-L—J ultimate course is difficult to foresee. ■ U.S. Tola! Employment, Left Axis 3.5 Inflation, Right Axis As mentioned, this forecast hinges 2.0

1 1.5 I I"'’ i 3.0 1 on the belief, based on the most recent data, that consumption spending will keep the economy

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2.0 i afloat. This could turn out to be a tenuous assumption if job losses were to mount or if the stock market were to plummet further (botl^ of which cannot be ruled out), dealing a 0.0 1.5 devastating blow to the economy. ____________ ,'l I ,_____________ _ -0.5 Im---------------- J 1.0 98 99 00 01 \ 02 ; 03 04 05 ( ■(

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