Tracking the Economy: Economists Follow February Job Data Upward and Boost Output Estimates
NEW YORK -- Economists padded their industrial production estimates -- grudgingly in some cases -- after February's robust payroll report.</br></br>The stronger job data are likely to be reflected in Friday's reports on output and capacity utilization, but analysts warn of several quirks in the employment numbers. What's more, they flag February's producer price index data as a reminder of troublesome inflation.</br></br>The week also holds reports on February housing starts and permits, retail sales and auto sales, and January's business inventories. Like the job figures, many of these reports can be swayed by seasonal factors or the stop-and-go auto industry.</br></br>Nonetheless, many economists were upgrading their output forecasts and thinking about raising their gross national product estimates last Friday after the job data were released.</br></br>"The numbers are the numbers, and that's the problem with this game," said Lawrence Kudlow, chief economist at Bear, Stearns & Co. Mr. Kudlow concedes he's considering raising his first-quarter GNP estimate of 1.5% by as much as a full percentage point after plugging the jobs numbers -- flawed or not -- into the GNP formula.