Marketplace: News Archives

Friday, October 6, 2000
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It's Friday, the 6th of October. I'm David Brancaccio.

Many things were nagging at stock market investors today, with Dow down 128 points, 1.2 percent and the Nasdaq down 3.2 percent. Here are three of the worries: Next week is time for many companies to stand and deliver, with a cascade of quarterly profit reports due out. There's concern those profits could disappoint. Number two. A jobs report today showing unemployment at a 30 year low: great news if you have one of those new jobs, not so good news if you worried about a strong economy driving up interest rates. The September headline figure is 3.9 percent, the lowest since 1970. That's from a survey of households. A parallel survey of employers finds that 252,000 new names were added to payrolls, that's a strong showing, but a portion of that was driven was Verizon phone workers coming back off the late summer strike. Tom Nardone at the Bureau of Labor Statistics helped compile these numbers. He says the biggest areas of growth are at the edges of the pay scales.

Nardone: "Through most of the decades up to the 90's, what you'd see is most of the growth has been in relatively high wage industry occupation categories and in low wage. It's sort of the ones in the middle where you haven't seen a lot of growth. And I should say that when we talk about high wages, we're not just talking about CEOs of Fortune 500 corporations. What we're talking about are professional jobs like teaching and nursing, in industries like healthcare and education and things like that."

An area of weakness... America's manufacturing sector keeps getting weaker, with about 100,000 jobs last at factories since the beginning of the year.

Nardone: "And then there's this very large group of people who are out of the labor force, some 68 million people. Of those, some, when they're asked say they want a job, even though they haven't done anything to look for a job recently. And, a very small number right now aren't looking because they don't think the job market conditions are good. Right now, it's about 250,000 discouraged workers. Which isn't much in a labor force our size."

Unemployment among African-Americans is the lowest since the government began tracking this back in 1972. The percentage of women out of work is the lowest for almost a half century.

Three days before Yom Kippur, the holiest day in the Jewish year, the situation is getting worse in Jerusalem. Yasser Arafat's Palestinian movement and the militant Islamic group, Hamas, declared today their "Day of Rage." They called on Palestinians to directly confront Israeli soldiers and police. Multiple battles broke out in the holy city. Israel pulled its troops from the Temple Mount, and in a direct challenge to Israel's sovereignty claim, Palestinians hoisted their flag over the Al Aqsa mosque. Despite efforts in Paris this week aimed at holding the peace process together, Christian Science Monitor reporter Cameron Barr says Arafat had little to risk by urging direct confrontation.

Barr: "Arafat can afford to sign up for a day of rage because things are going his way and a day of rage throughout the Arab world is meant to show the depth of support for the Palestinian cause. It's become clear as the peace process has evolved that there would have to be a sharing in Jerusalem and, in a way, a sharing of it's holy sites. And this, I think, many Palestinians and people in some Arab countries increasingly see this as unacceptable. And they want to register their extreme displeasure with this day of rage."

Over the past week, more than 70 people have been killed and some 1,900 injured. The televised images of violence are now daily. Does this mean that the peace process is over?

Barr: "In some ways there's no going back. That could change if what happens in the days and weeks ahead turns really, really ugly. But we have been through spasms of violence of at least this gravity in this decade, and the peace process has withstood it. Economically speaking, the Palestinian Authority is in a state of extreme dependence on its cooperation with Israel. And, if that were to be severed, which is certainly the first thing that would happen if there were a severe worsening of the situation, then the Palestinians would be in very, very tough shape."

Christian Science Monitor reporter Cameron Barr is based in Jerusalem.

Congress is poised to lift some of the restrictions on U.S. food exports to Cuba, opening up the first sales in nearly 40 years. From Washington, Marketplace's John Dimsdale reports.

Dimsdale: "After years of lobbying by farm interests, Congress is getting ready to lift sanctions on the sale of food and medicine not only to Cuba, but to other rogue nations such as Iran, Libya and North Korea. Anti-Castro lawmakers have resisted cracks in the Cuban trade embargo that was imposed in 1962. But a majority in Congress successfully argued that the U.S. sanctions have failed to bring change to Cuba and only hurt the Cuban people. The pain is also felt by U.S. grain, rice and livestock farmers who have ceded the Cuban market to Canadian, Asian and European competitors. But Dick Newpher, with the American Farm Bureau, says farmers can expect to be doing an extra $300-million worth of business in Cuba within a few years."

Newpher: "Because of our closeness to Cuba, we have an automatic edge on the transportation costs as compared with buying their rice in an Asian country. You know, the world price of basic commodities is fairly uniform around the world. So that transportation advantage will help us get into the market."

Dimsdale: "Opponents of the Cuban regime were able to keep limits on the financing of agricultural exports to the Caribbean island. And the deal imposes new restrictions on travel to Cuba by U.S. citizens. President Clinton today called both those provisions 'wrong', but did not threaten a veto. The changes to the embargo are part of an $80-billion agriculture spending bill that also allows pharmacists to import cheap drugs from overseas, expands food stamp eligibility and includes billions in subsidies for farmers. The Senate Majority leader, Trent Lott, says the bill contains enough pork barrel spending to gag a horse. The whole package is likely to be passed by the House and Senate possibly by the weekend. In Washington, I'm John Dimsdale for Marketplace."

And that's the top of our news for Friday.