BLS DAILY REPORT, FRIDAY, SEPTEMBER 30, 1999:
Although it remains unclear whether an economic slowdown is at hand, most
analysts say they are beginning to look closely at factors most likely to
signal a more moderate expansion. Labor market indicators -- especially job
growth and wage trends -- are high on the list of reports that analysts will
be scrutinizing in the weeks ahead. ... Inflation remains calm on the price
side, although higher energy prices are beginning to become more worrisome
to some forecasters who see potential for raising the overall costs of doing
business. On the wage side, analysts see some relief in hourly earnings
figures, but they await more comprehensive reports due in late October. ...
Employment figures for September will not be among the major data series
available to FOMC members Oct. 5, as they are scheduled for release by BLS
Oct. 8. The big question for most forecasters is whether the more modest
payroll gain in August -- just 124,000 for nonfarm employers -- will be
repeated in September. The average hourly earnings figures included in the
August jobs report were particularly reassuring to financial market analysts
worried about a strong advance that would prompt the Fed to raise rates. A
Lehman Brothers economist said he was pleased with the 3.5 percent rise in
average hourly pay, but will get more solid evidence on wage inflation from
the third-quarter employment cost index data, due out from BLS Oct. 28. ...
(Daily Labor Report, page D-1).
The economy is still growing at a rapid clip. Commodity prices are rising.
With unemployment low, workers are demanding and getting more pay. But for
every signal suggesting that inflation might be lurking just over the
horizon, there are others indicating that price increases are well under
control and that whatever inflationary pressures might be building will
dissipate in coming months. As a result, the Fed is likely to leave
interest rates unchanged when its policy committee meets on Tuesday,
analysts and economists say. ... (New York Times, page C1).
New unemployment insurance claims filed with state agencies rose by 25,000
to a seasonally adjusted 299,000 in the week ended Sept. 25, the Labor
Department's Employment and Training Administration has announced. This
increase stemmed most likely from Hurricane Floyd's impact on the Eastern
seaboard, according to the senior economist at Merrill Lynch. ... (Daily
Labor Report, page D-3; Wall Street Journal, page A2).
__Continuing a trend, American median household incomes in 1998 rose in
real, inflation-adjusted terms, and the number of people living in poverty
declined, the Census Bureau says. ... The annual report on income, based on
a survey of approximately 50,000 U.S. households, concluded that income
inequality did not change from 1997 to 1998, nor has it changed from 1993.
That assertion met with some surprise at a press briefing held on release of
the annual reports on income and poverty, in part because recent studies on
income disparity warn that the income gap between rich and poor is growing
-- a trend recognized by Secretary of Labor Alexis Hernan in a recent report
on the American workforce. Nevertheless, as Herman also noted in her
Futurework report, the growth of the income gap rose substantially between
1967 (the first year for which data on income distribution were collected)
and the early 1990s, but has remained "unchanged" since then, the Census
Bureau reports. ... (Daily Labor Report, page D-15).
__The typical American family's income reached an all-time high last year
even when adjusted for inflation, as the still-strong economy wiped out most
vestiges of the recession of the early 1990s. ... The nation's overall
poverty rate -- 12.7 percent -- was the lowest in 2 decades. ... Hispanic
families remain among the nation's poorest, but they made significant gains
in 1998. Their median income climbed by 4.8 percent, to $28,300. The
poverty rate for Hispanic families fell to 22.7 percent, from 24.7 percent
in 1997. ... (Washington Post, page A3).
__Lifted by the strong economy, American households are climbing out of the
income stagnation that has plagued them for year. ... The new census data
suggest that the strong economy and the lowest unemployment rate in 30 years
have played big roles in improving the lot of millions of American
households. But a high-end household, with an annual income of $133,000,
for example, still earned eight times more than a family at the poverty line
in 1998 of $16,655 for a four-person household. That has been the ratio
since 1993. ... (New York Times, page A1).
__First the good news: The economic boom continues to generate more wealth
for more Americans. The median income for households rose last year by 3.5
percent, adjusted for inflation, the fastest pace in 3 years. It's now at
an all-time high of $38,885. ... But the census study also offers stark
proof that life is still a struggle for millions of Americans. ... The
latest numbers suggest two big reasons for this mixed performance. First,
though this expansion, now in its 9th year, is remarkable in length, it was
so slow for so long that the past 3 years of hyper-growth and low
unemployment haven't been enough to make up for lost ground. ... Second,
the official statistics say that the fruits of prosperity in this decade
have been even more heavily skewed toward the rich than in prior booms. ...
(Wall Street Journal, page B1).
The U.S. economy expanded at the slowest rate in 4 years during the second
quarter, weighed down by sluggish inventory accumulation and rising imports,
the Commerce Department reports. ... (Daily Labor Report, page D-5)_____But
booming August home sales showed it was already regaining power. Gross
Domestic Product advanced at a revised 1.6 percent annual rate in the
April-June quarter instead of the 1.8 percent previously estimated -- the
weakest 3 months since the second quarter of 1995. ... (New York Times,
page C5)_____Sales of new homes climbed 2.9 percent in August, the third
consecutive advance, bucking a trend of slower sales for existing homes. ...
(Wall Street Journal, page A2).
The volume of help-wanted ads rose to 86 in August, from 85 in July, the
Conference board announces. The help-wanted index, which is based on
information from help-wanted advertising volume at 51 major newspapers,
compares monthly ad levels with the average volume recorded in 1987. The
difference is expressed as a percentage. "There are very few signs that
hiring will slow, as companies scramble to rebuild inventory," said
Conference Board economist Ken Goldstein. ... (Daily Report, page A-1; Wall
Street Journal, page A2).
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