[PEN-L:489] BLS Daily Report

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BLS DAILY REPORT, TUESDAY, AUGUST 4, 1998:

Manufacturing activity slipped for the second month in a row in July,
with declines in four key indexes:  production, order backlogs,
employment, and new export orders, the National Association of
Purchasing Management reports. On the other hand, the overall U.S.
economy continued to expand, albeit at a slower pace, and manufactures'
prices continued to drop, the latest data showed.  On the labor front,
NAPM's employment index slumped from 47.8 percent to 44.4 percent in
July.  Only four industries - furniture, food, textiles, and paper -
reported hiring gains.  As for inflation, NAPM's price index declined at
a slightly faster rate in July, receding from 38.4 percent o 38.0
percent.  That marked the seventh straight decline and the lowest
reading since November 1982, the trade group noted (Daily Labor Report,
page   A-2; The New York Times, in an Associated Press story, page D2).
__While manufacturing faltered, consumers fueled the economy this
summer.  The problem is, their aggressive spending drove their savings
to an all-time low, new data show (The Wall Street Journal, page A2).

American's personal income edged up 0.2 percent in June, held down by
the UAW strike at General Motors, the Commerce Department's Bureau of
Economic Analysis reports.  Wages and salaries increased 0.2 percent in
June, after jumping 0.6 percent in May.  Private industry wages inched
up 0.1 percent in June, following a 0.7 percent May gain (Daily Labor
Report, page D-1).

Figures released by the Commerce Department show that, during June, U.S.
consumers shelled out more money than ever - for cars, household
appliances, and a host of other goods and services - despite slowed
growth in their incomes and a flurry of headlines suggesting that the
current expansion finally may be winding down.  Personal spending for
June rose by an unexpectedly large 0.6 percent. And the government said
spending in May rose 0.9 percent, an upward revision of 0.3 percent from
its earlier estimate. On an annual basis, consumer spending is up 5
percent (The Washington Post, page E1). 
__Americans kept spending at a strong pace in June, even though their
incomes posted the smallest increase in 3 and a half years.  The
combination of weak income growth and strong spending pushed the
personal savings rate to a record low.  Even with the end of the General
Motors strike, many economists say economic growth will continue to be
slow for the rest of the year as the Asian crisis pushes America's trade
deficit to record levels and depresses manufacturing and foreign sales
by American farmers (The New York Times, in an Associated Press article,
page D2).  

Internet job ads soar in today's tight labor market.  Unisys Corp. posts
about 1,200 jobs, using as many as 30 different Web sites.  The computer
company fills about 5 percent of its needs this way, up from 2 percent a
year ago; it cuts its newspaper help-wanted budget to $1 million from
$2.5 million last year, even with more openings.  Chip maker Texas
Instruments, Inc., despite layoffs, expects to get about 15 percent of
its specialized U.S. hires through Web-site advertising this year, up 10
percent last year.  Economists consider adding Internet job listings to
the national help wanted index used in computing economic indicators
(The Wall Street Journal "Work Week" column, page 1).

An MBA from a top university is a "hot ticket," as pay climbs, says The
New York Times, August 2, in a page 1 article. The median offer this
year for a new Stanford MBA, for example, was $120,000, more than double
the first-year salary at the peak of the '80's, and more than 5 times
the 1978 figure.  Inflation has been 142 percent over that period.  Half
the graduates of the Wharton School of the University of Pennsylvania
received offers of more than $132,000 this year.  At the top 25 schools,
the best compensation packages offered to new MBAs are well above
$200,000. MBA's from top schools have made an enormous financial
commitment.  Tuition at these business programs is $25,000 a year for 2
years, 5 times the average for state schools; books, computers and
software account for a few thousand dollars more. 

Labor leaders acknowledge it is impossible to halt globalization, saying
their goal is to transform it into a less harmful force, says Steven
Greenhouse, in The New York Times, August 2, page WK 3.  "Trade unions
are trying to shape history, not reverse it," said David A. Smith,
director of public policy for the AFL-CIO. And economists point out,
globalization sometimes helps push wages up, not down.  Boeing and
Microsoft, for example, can pay high salaries partly because of the
immense foreign demand for their products.  Still, concerned that
globalization could prove the great downward leveler of wages, union
leaders often state that their goal is "upward leveling" - to improve
wages and working conditions abroad.  "If you raise labor standards in
low wage countries, that's good for them and it's good for us," said
Frank Borgers, professor of labor relations at the University of
Massachusetts.  "It would slow the exodus of jobs."


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