> BLS DAILY REPORT, WEDNESDAY, FEBRUARY 25, 1998
>
> ___Declining energy prices kept inflation at bay in January as
> measured by the CPI-U, which was unchanged for the month, seasonally
> adjusted, BLS reports. The monthly CPI rate was unchanged for the
> first time in four years, according to the report, the first based on
> a revised marketbasket of goods and services that more accurately
> reflects changing consumer buying habits over the last decade ….El
> Nino's impact on California's agriculture helped offset the drop in
> energy prices. This, in part, caused a sharp increase of 0.4 percent
> in grocery food prices, mostly due to a 2.9 percent rise in fruit and
> vegetable prices, BLS economist Patrick C. Jackman told the Bureau of
> National Affairs ….(Steve Teske in Daily Labor Report, page D-1).
> ___The government's report that prices in January did not rise for the
> first time in four years contains more than meets the eye. Behind
> inflation's vanishing act is the Labor Department's once-in-a-decade
> revamping of the CPI. A new formula that gives more weight to
> high-tech goods whose prices are dropping -- such as computers and
> cellular phones -- shaved about 0.2 percent from the index [sic], the
> department said ….(Patrice Hill in Washington Times, page A12).
>
> Longer hours and higher pay caused the real weekly earnings of the
> average U.S. worker to rise a seasonally adjusted 0.9 percent in
> January, BLS reports. The increase was due to a 0.6 percent rise in
> average weekly hours and a 0.3 percent increase in average hourly
> earnings ….(Daily Labor Report, page D-25).
>
> Consumer confidence in February reached a 30-year high, the Conference
> Board reports. The Consumer Confidence Index for the month rose 10
> points to 138.3 percent of its 1985 base ….(Daily Labor Report, page
> A-4).
>
> Federal Reserve Board Chairman Greenspan cheers the nation's 1997
> economic performance, but he warns that prospective fallout from the
> Asian currency crisis makes this year's economic outlook uncertain.
> In fact, during his semi-annual report to Congress on the state of the
> U.S. economy and monetary policy, Greenspan said the Fed's latest
> forecast is "more tentative than usual" despite its call for moderate
> growth and continued low inflation ….(Daily Labor Report, page
> A-14)_____Greenspan said the Fed is on hold until it determines if the
> "storm clouds massing over the western Pacific and heading our way"
> will damp the momentum of a U.S. economy on the verge of running out
> of available workers ….(Wall Street Journal, page A2).
>
> ___Fed Chairman Greenspan said that the Fed isn't currently
> contemplating any changes in interest rates and for the moment will
> let "countervailing forces" in the U.S. economy keep its
> noninflationary growth path in balance. Strongly rising demand for
> goods and services by confident consumers whose wealth and wages are
> rising are spurring growth. But a growing drag from the economic and
> financial upheavals in Asia is expected to slow it down, Greenspan
> told a House banking subcommittee …."A portrait of continued progress
> toward price stability" was certainly the message from the CPI, which
> was unchanged last month after rising 0.1 percent in December ….Two
> new categories were the result of the introduction of an updated
> market basket of goods and services based on consumers' spending
> habits in the 1993-95 period instead of those from 1982-84. However,
> before seasonal adjustment, the change in the index last month was the
> same under both methods. Meanwhile, Greenspan's comments were
> underscored by the soaring of the consumer confidence index to a
> 30-year high ….(John M. Berry, in The Washington Post, page C9).
> ___Greenspan warned investors and lenders against assuming that
> economic good times would last forever and suggested they could be
> underestimating the risks confronting the economy's powerful
> seven-year-old expansion ….His remarks had a dampening influence on
> the financial markets, partly countering the effects of the latest
> evidence of the economy's healthy performance, which showed no overall
> inflation in January and a surging level of consumer confidence ….The
> January figures were the first calculated by BLS using a revised
> market basket that takes into account changing consumer behavior and
> changes in technology ….(Richard Stevenson in The New York Times, page
> D1).
> ___Consumer confidence is soaring while consumer prices aren't
> budging, indicating that Asia's financial crisis is doing more good
> than harm to the U.S. economy -- at least for now ….The consumer price
> report contains some changes in the formula used to calculate the
> index "to reflect how people spend their money in the 1990s rather
> than how they spent it in the 1980s," said BLS economist Patrick
> Jackman ….(Jacob M. Schlesinger in The Wall Street Journal, page A2).
>
>
application/ms-tnef
