Quoth the BLS:
>The string of well-behaved inflation reports continued in November, with
>the CPI-U edging up 0.1 percent, seasonally adjusted, BLS reports. The
>CPU rose at just 1.8 percent (seasonally adjusted annual rate) in the
>first 11 months of 1997, compared with a 3.3 percent advance for all of
>1996. Not since 1986, during a free fall of oil prices that led to a
>1.1 percent advance, has the CPI increase been lower. Without special
>circumstances, like oil deflation, the CPI-U has not been as placid
>since 1964, when it rose 1 percent, Patrick Jackman, a BLS economist,
>says ....Turning to long-term improvements in the CPI, Jackman said BLS
>will release in February the results of its nearly year-long study of an
>experimental geometric mean CPI. This will determine how the agency
>will change its method of calculating price changes at the lowest level
>of detail. Earlier, the agency had said it hoped to release the results
>by the end of 1997. No changes in methodology will be made until early
>1999, Jackman said ....(Daily Labor Report, page D-5)_____CPI stories:
>Washington Post, page C15; New York Times, page D1; Wall Street Journal,
>page A2.
I'm wondering if the Boskin crowd lost the battle but won the war. The
various adjustments that BLS has made to the CPI over the last year or so
have knocked more than a few basis points off the CPI, and this geometric
mean revision will probably knock off a few more. Would US real wages be
rising at a 2% annual rate under the old CPI?
Doug
