[PEN-L:4439] BLS Daily Report

[Richardson_D]

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BLS DAILY REPORT, THURSDAY, MARCH 18, 1999

RELEASED TODAY:
   CPI -- The CPI-U rose 0.1 percent in February, on a seasonally adjusted
basis, the same as in each of the preceding 2 months.  The food index, which
advanced 0.5 percent in January, increased 0.1 percent in February.  The
index for food at home also rose 0.1 percent in February, following a 0.5
percent rise in January.  The deceleration was largely due to a sharp
downturn in prices for fruits and vegetables. The energy index, which fell
0.2 percent in January, was unchanged in February.  The index for
petroleum-based energy declined 0.5 percent, while the index for energy
services increased 0.4 percent.  Excluding food and energy, the CPI-U
increased 0.1 percent in February, the same as in January. ...     REAL
EARNINGS -- Real average weekly earnings increased by 0.7 percent from
January to February after seasonal adjustment.  This growth was due to a 0.6
percent increase in average weekly hours and a 0.1 percent increase in
average hourly earnings.  The CPI-W was flat. ...  After adjustment for
inflation, average weekly earnings grew by 1.9 percent from February 1998 to
February 1999. ...  

U.S. manufacturing productivity growth in 1997 was slower than in six of 11
economies studied, according to revised estimates by BLS.  Productivity grew
at a slower rate than the United States' 4.2 percent in Canada and Italy
(both 2.7 percent), Norway (0.6 percent), and the United Kingdom (0.5
percent). ...  (Daily Labor Report, page D-3).

Labor markets continued to tighten in late January and in February, and wage
pressures were building, but prices remained stable, the Federal Reserve
reports in its latest "beige book."  The Fed notes labor markets remained
taut with higher employment levels in nearly all districts. ...  Demand
intensified for temporary help firms in January and February. ...  (Daily
Labor Report, page C-1)_____The robust economic growth of 1998 carried into
the new year with strong consumer spending, brisk construction activity, and
increasing demand for labor.  Despite that, prices of most goods remain
little changed, and businesses remain reluctant to press for price
increases.  The exception was construction materials such as lumber,
drywall, and insulation. ...  (Washington Post, page E3)_____The economy's
run of strong growth and low inflation shows few signs of changing. ...
(New York Times, page C6; Wall Street Journal, page A2).

"The problem for small retailers is labor," says Louis Uchitelle, writing an
"Economic View" column in The New York Times (March 14,  Money & Business
section, page 6).  The shining characteristic of the 1990s expansion, in
contrast to those of the 1970s and 1980s, is that wages have risen faster
than inflation for most workers.  The raises for people at the low end,
earning $6 to $9 an hour, have been particularly strong. ...  But in many
cases, retailers can't raise prices to offset higher payroll costs -- too
much competition. ...  Big companies, however, can deflect higher labor
costs by moving operations to lower-wage cities, or by automating.  Such
tactics are not really an option for many small retailers. ...  The
experience of small retailers is reflected in surveys of the National
Federation of Independent Business, which has 600,000 members.  Most of the
members have fewer than 40 employees.  A significant percentage report that
their profits are under pressure and that they are having trouble filling
jobs.

DUE OUT TOMORROW:  Regional and State Employment and Unemployment:  February
1999


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