December 1, 2001

Report Offers Conflicting Signals on the Recession The economy shrank much more this summer than the government initially estimated, the Commerce Department said. The revised report offered conflicting signals about how long the current recession would last. In the third quarter, the economy contracted at an annual inflation-adjusted rate of 1.1 percent, its worst showing since 1991, during the nation's last recession. The government had originally reported a 0.4 percent decline, but new data led to the steeper drop reported in the scheduled revision. [Page C4.]

New York's elected officials in Washington and Albany meet with Dennis Rivera and others from 1199/SEIU, New York's Health and Human Service Union, to discuss urgent need for financial aid to city's hospitals; union says it is seeking more than $1 billion to help hardest-hit facilities and that Sept 11 attack cost more than $350 million in readiness, security and supplies; Rep Charles Rangel is pessimistic about chances of getting federal aid, but Sen Charles Schumer is more hopeful (M)

Northern Alliance discovers small compound in Kunduz used as headquarters by Islamic Movement of Uzbekistan, Central Asia's largest terrorist group, and its leader Juma Namangani, who is thought to have been killed nearby; Namangani's home within compound served as academy for preparing soldiers and terrorists to export international Islamic jihad and emphasized incursions into Uzbekistan, Tajikistan and Kyrgyzstan; academy was abandoned as Northern Alliance forces swept through Kunduz but documents and other materials salvaged confirm Namangani's ambition of fomenting religious war; photo of document showing how to make suitcase bomb (M)

LUXURY IN HARD TIMES The fashion designer Tom Ford is trying to ensure a place for Gucci in a daunting new environment. A report by Lynn Hirschberg in The Times Magazine.

Northern Alliance leader Burhanuddin Rabbani questions talks in Bonn, saying new temporary government can wait until elections are held; refuses to permit delegation to submit names of candidates for interim administration; says former monarch Mohammad Zahir Shah should have no special role and that international security force should be limited to about 200 members; delegates and diplomats in Bonn interpret Rabbani's statement as stalling for time so Northern Alliance can consolidate power; United Nations envoy Lakdar Brahimi contends delay is unacceptable; United States asks Russia and Iran, which have closer ties to Rabbani, to press him to abide by his commitment to honor results of Bonn meeting and not block work of his delegation; photo (M)

Nationwide manhunt for Robert A Durst, scion of wealthy Manhattan real estate family, ends in Bethlehem, Pa, where he is arrested in supermarket for shoplifting; he is wanted on charges of murdering and dismembering 71-year-old Morris Black, neighbor in Galveston, Tex; investigators in New York hope to interview him about disappearance first wife Kathleen Durst 19 years ago; photo (M)

Connecticut officials, in first investigative break, report discovery of trace amount of anthrax on letter delivered to family living mile from Oxford home of 94-year-old Ottilie W Lundgren, who died of inhalation anthrax; say letter received by family in Seymour in October was processed in New Jersey mail center within 15 seconds of letters sent to US Sens Tom Daschle and Patrick J Leahy; finding, announced by Gov John Rowland, is forcing health officials to consider seriously that person can contract deadly form of disease from tiny amount of spores on letter that merely came in contact with powerfully poisoned letters sent to lawmakers; officials say no one in Seymour family became ill; emphasize risk to general public remains minimal; photo (M)

Sheriff Held in Killing The former sheriff of DeKalb County, Ga., has been charged with murdering the man who, vowing reform, had succeeded him. PAGE A10 G.O.P. Chief Steps Down Gov. James S. Gilmore III of Virginia resigned as Republican Party chairman, ending months of tension with the White House. PAGE A11

Study from researchers at Tufts University estimates that average cost of developing new drug has more than doubled since 1987, to $802 million; Drs Kenneth I Kaitin, director of Tufts Center for Study of Drug Development, and Joseph A DiMasi, principal author of study, comment; researchers say it cost average of $231 million to develop new drug in 1987; say if cost had risen at pace of inflation, it would have reached $318 million in 2000; Pharmaceutical Research and Manufacturers Association welcomes study; some consumer advocates criticize study as biased and say it overstataes costs of drug development; Sen Ron Wyden says study drives home need for Medicare coverage of prescription drugs; Repr Henry A Waxman says pharmaceutical costs, including research, are hidden from view (M)

US forces probe last military strongholds of crumbling Taliban government in Southern Afghanistan; encounter no resistance; hundreds of marines from three amphibious assault ships flow into former military compound in formerly Taliban-controlled territory, turning it into heavily fortified base with one of largest concentrations of American forces on ground since war began on October 7; photo (M)

New York Mets co-owner Fred Wilpon hints he might allow general manager Steve Phillips to exceed $95 million budget to sign top player (M)

Argentines rush to withdraw their savings from banks on fears government could freeze deposits to shore up weakened financial system and prevent devaluation of peso; Economy Min Domingo Cavallo goes on national television to guarantee deposits and try to persuade Argentines to leave their money in banks; announces 5 percent reduction in value-added tax on purchases made on debit card, in which funds are drawn directly from consumers' bank account; futures contracts trade at 1.37 pesos to dollar, indicating that traders expect currency to fall by 37 percent by end of year; over next 12 months, futures trading projects 75 percent decline; graph; photo (M)