[PEN-L:1959] BLS Daily Report

[Richardson_D]

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BLS DAILY REPORT, WEDNESDAY, DECEMBER 30, 1998

RELEASED TODAY:  In November, 207 metropolitan areas had unemployment rates
below the U.S. average, while 113 areas had higher rates.  Of the 20
metropolitan areas with rates below 2.0 percent, 14 were located in the
Midwest, and 5 were in the South.  Of the 14 areas with jobless rates of 9.0
percent or more, 8 were in California, and 5 were along the Mexican border
in other states. ...  

"Consumer Choice and the CPI:  Tossing a Variable Into the Market Basket" is
the title of a "Trendlines" article by John M. Berry in the Washington Post.
Berry says that BLS has been publishing an experimental version of the CPI
that adjusts for consumer substitution of an item when a similar one goes up
in price.  A version of this formula, to be used officially beginning next
month, lowers the index's annual increase by about 0.2 percentage points.
....  This change, one of a series of alterations the agency has made in the
CPI over the past several years to make it a truer measure of shifts in the
cost of living, will be important for a wide swath of the U.S. population.
For instance, it will reduce the annual cost-of-living adjustments in many
government benefit programs, such as Social Security, relative to what the
COLAs would have been without the change.  It also will slightly reduce the
annual adjustments made in parts of the personal income tax code to offset
inflation, such as the size of personal exemptions, the standard deduction,
and the so-called income break points between different tax brackets. ...
When BLS Commissioner Katharine G. Abraham announced in April that the new
formula, known as a geometric mean, would be used beginning in January, she
noted that substitution isn't a simple matter. ...  

Home sales climbed to just short of July's record during November, rising
2.7 percent from October amid a strong economy, mild weather, and low
mortgage rates. ...  (Wall Street Journal, page A2).

After rising sharply in November, consumer confidence held steady in
December, the Conference Board reports.  It says the consumer confidence
index dipped 0.3 percentage point in December to 126.1. ...  (Daily Labor
Report, page A-8)_____Consumer confidence bodes well for spending in early
1999. ...  (Wall Street Journal, page A2).

Sales of existing homes rose 2.7 percent in November, staying on track to
set a record in 1998, according to the National Association of Realtors. ...
Meanwhile, consumers' confidence in the economy held steady, although
Americans grew more cautious in their outlook for the future. ...
(Washington Post, page C13)_____ Sales of existing homes rose in November to
their second-strongest rate ever, energized by optimistic consumers, low
mortgage rates, and job gains. ...  (New York Times, page C2).

DUE OUT TOMORROW:  Extended Mass Layoffs in the Third Quarter of 1998


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