BLS DAILY REPORT, TUESDAY, FEBRUARY 22, 2000
__The consumer price index for all urban consumers (CPI-U) rose a seasonally
adjusted 0.2 percent in January, an identical increase to the preceding
three months, BLS reported. Energy costs continued to rise in January,
increasing 1 percent after a 1.8 percent December gain. More advances of
this magnitude are likely because, according to Department of Energy data,
oil prices have continued their rise into February. ... (Daniel J. Roy in
Daily Labor Report, page D-8).
__ The Consumer Price Index, the nation's best-known inflation measure,
edged up only 0.2 percent in January -- the fourth consecutive mild increase
-- undercutting numerous forecasts that the booming economy is creating
shortages that must inevitably show up in more rapidly rising prices.
Apparel and cars helped to keep inflation in check in January. Prices fell
in both categories, with apparel prices dropping 1.1 percent, the biggest
one-month decline since February 1989. Energy prices jumped, of course,
rising by 1 percent, but that was a smaller increase than many analysts had
expected given the steeply rising cost of crude oil. "Other than
petroleum-based energy -- mainly gasoline and heating oil -- there has been
no steady price acceleration in any sector of the economy," said Patrick
Jackman, a senior economist in the Bureau's consumer price division. ...
(Louis Uchitelle in New York Times, Feb. 19, page B1).
__The CPI provided further evidence of a benign inflation picture. But some
economists are beginning to detect troublesome signs. They worry that the
inflation reports were pushed down by unusually large price decreases in
certain areas, which buck recent trends and are unlikely to recur. Absent
these drops, the overall inflation numbers would have edged higher. ...
(Yochi J. Dreazen in Wall Street Journal, page A32).
__Consumer prices edged up 0.2 percent in January as the biggest drop in
clothing prices in nearly 11 years helped offset rising energy costs. ...
(Washington Post, Feb. 19, page E1).
The inflation-adjusted weekly earnings of most U.S. private industry workers
climbed 0.6 percent in January, the largest monthly gain since last June,
according to BLS. The 0.6 percent increase in real pay reflected a 0.4
percent gain in average hourly earnings and a 0.3 percent rise in hours
worked by production or nonsupervisory workers on private industry payrolls
outside of agriculture. BLS said it was the first time since October that
hours increased. ... (Daily Labor Report, page D-22).
The U.S. trade deficit narrowed to $25.5 billion in December, but the
imbalance for all of 1999 surged 65.1 percent to a record-high $271.3
billion, the Commerce Department reported. ... (Daily Labor Report, page
D-10; Wall Street Journal, page A2)_____The U.S. trade deficit in goods and
services narrowed in December, as rebounding economies abroad kindled record
demand for American goods. Still, the trade gap for 1999 was its widest
ever. ... (New York Times, page B14)_____The U.S. rang up triple records in
trade in 1999: imports, exports, and the resulting deficit. ...
(Washington Post, Feb. 19, page E1).
Since the early 1980s, the U.S. temporary help industry has been on a roll,
tripling the number of workers on its payrolls in the last 10 years alone.
... A recent study based on government data by Marcello Estevao of the
Federal Reserve and Saul Lach of Hebrew University in Jerusalem finds that
the use of temps supplied by outside agencies has risen in most major
industries -- with the exception of the public sector. ... The percent of
the temporary help industry's workforce used by manufacturing companies
tripled between 1987 and 1997, to 30 percent. And the demand for temps by
the service sector also rose substantially, to about 45 percent of the
total. In addition, a lot more blue-collar workers and male workers entered
temporary help industry ranks. ... According to the researchers, this helps
explain the apparent flatness of factory employment in the 1990s. And it
suggests that the average annual increase in manufacturing productivity
would be about half a percentage point smaller than reported -- if the hours
put in by workers on temp-industry payrolls were factored in. (Business
Week, Feb. 21, page 25).
Updating its 2000 outlook, consultant William M. Mercer Co. says that, among
the more than 1,900 employers it surveyed, average pay increases in December
ranged from 4.2 percent for hourly workers to 4.4 percent for managers.
That's up from a range of 3.9 percent to 4.2 percent this past July. To
attract and keep workers while holding down costs, 30 percent to 35 percent
of companies will boost performance incentives. ... Such moves reflect a
growing worker shortage and continued economic optimism, says the head of
Mercer's employee-compensation practice. ("Work Week," Wall Street Journal,
page A1).
For the past year, even as the price of oil nearly tripled to $30 a barrel
from less than $11, policy makers, economists, and many in the oil industry
itself hewed closely to the same line: Oil does not matter much anymore.
Technology, which depends much less on energy than manufacturing, now drives
economic growth. OPEC, the once fearsome cartel of oil producing countries,
had become impotent. And oil, the old king of commodities, seemed to have
no more power to sway the American economy in the Internet age than cotton
or copper. Such thinking was, and, to a certain extent remains,
conventional wisdom. But it has taken only a few weeks of $2-a-gallon
heating oil, $20 airline ticket surcharges, and $60 bills to gas up the
sport utility vehicle to make people wonder if oil is really so irrelevant
after all. The surge in oil prices has ignited a debate about whether the
economy is as immune to an old-fashioned commodity as many had come to
believe and, if not, whether oil could pose a threat to the record-long
American economic expansion. The surge has also made Washington nervous
about the intentions of oil-producing countries for the first time since the
Persian Gulf war, when oil last crested $30 a barrel. ... (New York Times,
Feb. 21, page A1).
DUE OUT TOMORROW: Mass Layoffs in December 1999
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