[PEN-L:2324] BLS Daily Report

[Richardson_D]

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BLS DAILY REPORT, FRIDAY, JANUARY 15, 1999

RELEASED TODAY:  The U.S. Import Price Index decreased 0.7 percent in
December.  The decline followed a 0.5 percent decrease the previous month
and was again attributable to a large decline in petroleum prices.  Prices
for nonpetroleum imports were unchanged in December.  Export prices edged
down 0.1 percent in December, after increasing 0.2 in November. ...  

__The CPI-U edged up a seasonally adjusted 0.1 percent in December and
advanced a modest 1.6 percent in 1998.  Not since 1986, when the CPI-U rose
1.1 percent, has the price index been this quiescent.  In 1997, the CPI-U
rose 1.7 percent.  Energy prices, which fell 1.4 percent in December and
dropped 8.8 percent in 1998, helped hold back consumer price increases.  The
1998 decline in energy costs is the sharpest drop since a 19.7 percent
plunge in 1986.  Analysts do not expect energy prices to fall as steeply in
1999 as in 1998. ...  Although the CPI core rate accelerated in 1998 to 2.4
percent from the 2.2 percent gain in 1997, much of this advance can be
attributed to increased tobacco prices, says BLS economist Patrick Jackman.
....  (Daniel J. Roy in Daily Labor Report, page D-1).

Real average weekly earnings were up 0.5 percent in December, after
adjustments for seasonal employment variations, BLS reports. ...  (Daily
Labor Report, page D-18).

Retail sales rose 0.9 percent in December, lifted by strong sales of autos
and other durables, the Commerce Department says. ...  (Daily Labor Report,
page D-24).

New claims filed with state agencies for unemployment insurance benefits
dropped 4,000 to a seasonally adjusted 352,000 in the week ended Jan. 9, the
Employment and Training Administration of the Department of Labor announces.
This decrease continues the previous week's slide, with claims declining by
a revised 16,000 in the week ended Jan. 2.  Both of these declines follow
the dramatic increase of 83,000 claims in the week ended Dec. 26, 1998. ...
(Daily Labor Report, page D-22).

__The U.S. economy last year displayed an almost unprecedented combination
of strengths - including low inflation, low unemployment, and strong retail
sales.  BLS reported that consumer prices rose by a scant 1.6 percent in the
12 months ended in December, an even lower rate of inflation than the year
before when the consumer price index rose by 1.7 percent.  It was the first
time in more than 30 years that the economy could boast two years of such
low inflation back to back.  Cheap energy and falling prices for computers
helped keep inflation low, with the only major price rise occurring for
cigarettes.  Separately, the Commerce Department reported that retail sales
in December were up 0.9 percent from the same month a year before.  Sales of
automobiles and housing materials were major contributors to the increase.
....  The last time the economy displayed anything close to this combination
of favorable indicators appears to have been in the mid-1950s, according to
Patrick C. Jackman, an economist at BLS.  In addition to the report on
consumer prices, initial claims for unemployment insurance fell in the week
ended Jan. 9. ...  Jackman said the U.S. economy had also enjoyed strong
growth in 1955, when the unemployment rate was 4.4 percent and the inflation
rate was only 0.4 percent.  But the strong growth at that time resulted from
coming out of a recession, he said. ...  (Martha M. Hamilton in Washington
Post, page E1).
__Consumer prices rose in 1998 at their slowest pace in 12 years, and retail
sales surged in December, capping a year in which rising wages allowed
consumer spending to rise at its fastest pace since 1984 and energized the
economy's longest peacetime expansion. ...  (Bloomberg News story in New
York Times, page C2).
__Consumer prices rose just 0.1 percent in December and a tiny 1.6 percent
for all of last year, the lowest rate since 1986.  Meanwhile, retail sales
increased a surprisingly strong 0.9 percent during December. ...  (Rodney Ho
in Wall Street Journal, page A2).

Business executives' optimism about sales, profits, and new orders fell in
the current quarter, according to a survey by Dun & Bradstreet. ...
(Washington Post, page E1).

Companies increasingly will turn to employees who work under short-term
contracts, typically without benefits, to fill their personnel needs during
the next few years, according to a study commissioned by TAC Worldwide Cos.,
a Newton, Mass., staffing firm.  The report found that only 39 percent of
the more than 100 companies surveyed in November and December increased
their contract staffing in 1998.  However, 54 percent of respondents said
they expect increases in 1999, and 66 percent foresee growth over the next
five years. ...  According to TAC, the most compelling reason for the shift
to contract workers is the demand for a more flexible workforce in which
companies can employ workers with specific skills as needed. ...  (Daily
Labor Report, page A-3).


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