BLS DAILY REPORT, THURSDAY, OCTOBER 26, 2000
RELEASED TODAY: The Employment Cost Index (not seasonally adjusted) for
September 2000 was 149.5 (June 1989=100), an increase of 4.3 percent from
September 1999. The Employment Cost Index (ECI) measures changes in
compensation costs, which include wages, salaries, and employer costs for
employee benefits. On a seasonally adjusted basis, the 3-month increase in
compensation costs for civilian workers (nonfarm private industry plus state
and local government) was 0.9 percent during the June-September 2000 period,
following a gain of 1.0 percent in March-June 2000. Wages and salaries
increased 0.8 percent during the June-September period, following a 1.0
percent increase in the previous 3-month period. Benefit costs rose 1.0
percent during the September quarter, following a 1.1 percent increase in
the June quarter. ...
Companies worldwide are increasing their use of stock and other long-term
incentives as a way to attract and retain key employees, according to a
report of employer reward practices in 26 countries. The annual Worldwide
Total Remuneration Report by the New York City-based human resource
consulting firm Towers Perrin found U.S. companies are leading the way in
providing long-term incentives to employees. In the United States, more
than 11 million employees are now covered by long-term incentive stock
plans, with stock options by far the most common typed of long-term
incentive, especially for senior management. ... (Daily Labor Report, page
A-2).
State personal income during the second quarter of 2000 grew in all 50
states and the District of Columbia for the first time in nearly 4 years,
according to data from the Commerce Department's Bureau of Economic
Analysis. Led by strong earnings growth in the finance, insurance, and real
estate industries, Nevada and Delaware topped the list of states with the
fastest personal income growth during the second quarter, BEA said.
Nevada's personal income grew 2.5 percent during the period, while income in
Delaware was up 2.4 percent. ... (Daily Labor Report, page D-1).
__Sales of previously owned homes fell last month to a pace that still shows
the economy has not lost much of its vigor. Home resales fell 2.7 percent
in September, according to the National Association of Realtors. The
decline came after a 9.5 percent rise in August resales that was the biggest
monthly increase since June 1999. ... (New York Times, page C5; Washington
Post, page E2).
__Consumers shrugged off signs of a slowing economy and a volatile stock
market and continued to snap up homes at a rapid pace in September. While
sales of previously occupied, or existing, homes were down 2.7 percent from
August's unusually strong rate, they were down just 0.2 percent from the
pace of a year ago. An annual sales pace in excess of 5 million units is
generally considered to be evidence of a very strong market. Looking
forward the chief economist at First Union Corp. in Charlotte, N.C., and
others said they expect Americans to continue to buy homes at a relatively
strong clip, so long as unemployment and mortgage rates remain low. ...
(Wall Street Journal, page A2).
__The Federal Reserve has spent more than a year trying to steer the U.S.
economy toward a soft landing of slower growth and modest inflation. If
leaders of some of the nation's largest companies are correct, those efforts
are soon to get much harder. An overwhelming majority of the chief
executives of such titans as Cisco Systems Inc. and McDonald's Corp. expect
economic growth to slow next year and inflation to rise. Such a scenario
could create a dilemma for the Fed, which may have to choose between cutting
interest rates if growth slows too much, or boosting rates if prices
threaten to spiral out of control. The executives, members of the Business
Council, a group of active and retired CEOs from hundreds of the U.S.'s
leading companies, also said in a survey that it is increasingly difficult
for them to raise prices in response to higher energy or labor costs. That
suggests corporate profit margins could come under even greater pressure in
the months to come. The pessimistic forecasts came as the industry group
begins a 2-day semiannual meeting in Boca Raton, Fla., on topics ranging
from global population trends to the future of technology. ... (Wall Street
Journal, page A2).
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