The 0.7 percent drop in industrial production reported for the month of June and the 0.5 percent decline in May added to the slip begun last October. It constitutes the longest decline in industrial production in almost two decades.

The federal government reported that the decline came primarily from the manufacturing of computer chips, telecommunications equipment, trucks, consumer appliances, and furniture, along with other industrial sectors.

In his report to the House Financial Services Committee, Greenspan projected that the unemployment rate, currently at 4.5 percent, would go up to 4.75 to 5 percent by the end of this year. He said the figure could climb as high as 5.25 percent in 2002.

The Labor Department reported July 6 that 114,000 jobs had been slashed by the capitalist bosses in June, with an estimated 113,000 of them in the manufacturing industry. The job losses also affected the wholesale distribution and transportation sectors, and for the first time since 1958 the ever-growing service sector also suffered a slight drop.

Officials at American Express announced July 19 that they will cut 5,000 jobs due to the slowing down of the economy and investment losses. The financial giant reported losses in junk bonds and in investment-grade bonds and securities considered to offer greater protection to investors.

Last June, the U.S. economy registered a 1.2 percent drop in productivity--the cost of labor used to produce goods and services--rasing concerns of a stalled productivity growth, a factor closely tied to the profits the bosses extract from the labor of working people. The bosses' much-hailed "productivity boom" of the 1990s was built on ever-increasing speedup, lengthening of the workday and workweek, and the driving down of wages.

Faced with relatively low unemployment levels and increased working-class resistance, the bosses have run into obstacles in pushing their productivity drive even further. "We had very tight labor markets throughout that period," said John Youngdahl, a senior economist at Goldman Sachs, "and workers had a lot of leverage. They were able to claw back some of the costs they were experiencing," he concluded.

The speed of the economic slowdown in the United States and the degree of its impact on the world economy is raising concerns within ruling-class circles that interdependence of the capitalist economies undermines the ability to absorb and contain financial shocks in Asia and Latin America and reinforces slowing economies in Europe and Japan.  
 
 
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