BLS DAILY REPORT, WEDNESDAY, AUGUST 23, 2000
The booming U.S. economy has created enough new jobs this summer to push
down the youth unemployment rate to 9.6 percent -- its lowest summer level
since 1969 -- according to BLS. The 9.6 percent jobless rate recorded for
July among workers age 16-to-24 was down from 10.1 percent a year ago. More
than 2.2 million young workers were added to business payrolls between April
and July of this year, which was down from the summer 1999 youth employment
gain of 2.8 million. ... (Daily Labor Report, page D-1).
As the Federal Reserve Board's Open Market Committee met to review
interest-rate policy, relying on reams of economic statistics to inform
their decisions, an economists group warned that federal budget cuts may be
undermining the data's reliability. The National Association of Business
Economists said that a relative decline in funding for two key federal
statistical agencies threatens economic data used by banks and businesses,
Congress, and the Fed alike. The group is trying to win about $10 million
more in next year's budget for the Commerce Department's Bureau of Economic
Analysis and the Census Bureau's economic and statistical analysis branch --
money that the NABE and others say is needed to ensure proper calculation of
such important figures as gross domestic product and the trade balance. ...
The agencies that gather economic statistics are suffering not because they
have enemies in Congress, say lawmakers, but rather because they have few
vocal supporters and thus fall to the end of the line in the annual budget
process. ... Meanwhile, staff turnover at BEA is up, and its computer
system is outmoded. The GDP report almost didn't make it out recently after
a massive system crash. ... (Wall Street Journal, page A2).
The Federal Reserve's policy-setting Open Market Committee (FOMC) opted to
leave interest rate targets unchanged, but the group warned inflation risks
still could threaten future economic growth. Still, the Fed seemed to adopt
a more satisfied tone in its announcement, noting that recent data suggest
activity is slowing to a pace more consistent with noninflationary growth.
In fact, unlike its June 28 statement, the FOMC made no explicit mention of
either core or energy prices Aug. 22, economists noted. Analysts said the
announcement suggests the Fed can take a stand-pat position on monetary
policy over the next few months, although it may want to nudge short-term
interest rates up another quarter-point before the end of the year. ...
(Daily Labor Report, page A-8)_____Acknowledging that recent economic data
point to a cooling economy, the Federal Reserve held interest rates steady
again, although policy makers said they remain concerned about inflation.
... In a statement accompanying the decision, the Fed said growth is
moderating toward a pace closer to the economy's "potential," while
continued gains in work-force efficiency are "containing costs and holding
down underlying price pressures." ... (Wall Street Journal, page
A2)_____Reassured by evidence that wage and price increases remain under
control despite robust economic growth, the Federal Reserve voted to leave
interest rates unchanged but warned that it might raise them later in the
year if inflation creeps up. ... The decision displayed the Fed's
confidence that the economy is gradually moving onto a path of slightly more
modest, though more sustainable, growth, but suggested as well that the
central bank is not yet sure that its campaign of rate increases is
complete. ... (New York Times, page C1)_____Federal Reserve officials,
encouraged that U.S. economic growth appears to be slowing enough to keep
inflation in check, decided to leave short-term interest rates unchanged.
But the statement from the Fed's top policymaking group cautioned that with
the nation's jobless rate so low -- it was 4 percent last month -- the
committee 'believes the risks continue to be weighed mainly toward
conditions that may generate heightened inflation pressures in the
foreseeable future." ... (Washington Post, page E1).
After enduring a summer in which gasoline was eye-poppingly expensive,
consumers are likely to be hit with another big fuel bill this winter as
natural gas prices have crept steadily upward. Home heating bills for
Washington area residents could be 27 percent higher than last winter. With
utilities paying roughly twice the amount they paid for natural gas a year
ago, the problem is already apparent -- but will be most painfully felt by
homeowners when winter heating bills start to arrive. Energy analysts say
the natural gas industry is in a difficult place now, right on the verge of
the season in which people most use its product, because production is off
and inventories are low. ... (Washington Post, page E1).
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