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HUNTINGTON CHIEF ECONOMIST: ECONOMIC LULL TO PERSIST

 COLUMBUS, Ohio, Sept. 3 /PRNewswire/ -- James W. Coons, vice president and chief economist for The Huntington National Bank in Columbus, Ohio, says that today's reports on employment in August and the leading economic indicators for July confirm that the economy will continue to struggle for the remainder of the year.
 The employment report noted several positive developments. The July increase in employment was revised up to 211 thousand and the unemployment rate fell to 6.7 percent -- its lowest level since July 1991. The average workweek lengthened in manufacturing and in the entire private sector and manufacturing overtime increased. Historically, a lengthening of the workweek has preceded increased hiring. Total hours worked expanded at an annual rate of 8 percent from July. The broadest measure of employment increased 409 thousand in August, following an 82 thousand worker increase in July. Total employment increased 69 thousand in Ohio, pushing the unemployment rate down to 5.6 percent.
 The balance of the jobs report was uniformly grim. Nonfarm payrolls decreased 39 thousand in August -- well below the expectation of a 150 thousand gain and the first decline in more than a year. Manufacturing employment dropped 42 thousand and construction employment fell 8 thousand. About 30 thousand of the 172 thousand two-month change were teenagers hired under the federal summer jobs program. The remainder were accounted for by the "plug" factor used to adjust for the under-representation by smaller firms in the survey.
 In addition, the decrease in payrolls was pervasive. Fifty-three percent of all private industries reported declines in employment from July to August and nearly 60 percent of manufacturing industries reported one-month declines. Almost 65 percent of all manufacturing industries reported lower employment levels than in May.
 Initial claims for unemployment compensation and the volume of help- wanted advertising suggest little near term improvement in job prospects. Surveys of hiring plans point to even weaker conditions in the fourth quarter.
 The 0.1 percent decline in the composite leading economic index in July added to concerns about the economy. The drop was broad-based, with seven of the eleven components contributing negatively, and was the fourth in the last seven months. Based on the recent pattern of the index, Coons estimates that the probability of impending recession increased to approximately 30 percent. "The probability of recession has to climb above 90 percent before it becomes a real cause for concern," said Coons, "but an estimate of 30 percent is consistent with no more than modest economic growth for the remainder of the year."
 -0- 9/3/93
 /CONTACT: Jim Coons of The Huntington National Bank, 614-463-4467/


CO: The Huntington National bank ST: Ohio IN: FIN SU: ECO

AR -- CL008 -- 8797 09/03/93 11:34 EDT
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Publication:PR Newswire
Date:Sep 3, 1993
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