> BLS DAILY REPORT, MONDAY, JUNE 18, 2001:
>
> Consumer prices rose 0.4 percent in May, as fuel prices climbed higher for
> the second consecutive month, the Bureau of Labor Statistics of the
> Department of Labor reported. Excluding the volatile food and energy
> components of the index, consumer prices rose a slightly
> better-than-expected 0.1 percent in May, the smallest monthly increase
> since December 2000, BLS said. "This was a very favorable report. We
> were obviously plagued by gasoline hikes that didn't show up in the June
> 14 release of the producer price index, but price pressures have generally
> been quite mild," said the senior economist at Nomura Securities of New
> York (Daily Labor Report, page D-1).
>
> The inflation-adjusted weekly earnings of most U.S. workers rose 0.2
> percent on a seasonally adjusted basis in May, reflecting an expansion of
> hours worked as well as pay gains, the Bureau of Labor Statistics
> reported. May's modest gain in real earnings was only the second monthly
> increase in the last 6 months. In March, weekly pay rose 0.4 percent,
> only to be reversed by a 0.4 percent drop in April (Daily Labor Report,
> page D-1).
>
> Recent Labor Department statistics suggest there may be a decline in U.S.
> job losses related to international trade. The Labor Department
> determined in fiscal year 2000 that an estimated 97,764 workers could be
> eligible to apply for benefits under the Trade Adjustment Assistance
> program and that 47,275 might be eligible for benefits under the North
> American Free Trade Agreement's Transitional Adjustment Assistance
> program. These figures compare with the 158,649 DOL estimated as eligible
> for TAA benefits and the 68,730 estimated as eligible for NAFTA-TAA
> benefits the previous fiscal year. The Economic Policy Institute recently
> argued that the "ill effects" of NAFTA should be considered in the push to
> extend free trade beyond Mexico and Canada (Daily Labor Report, page A-1).
>
> Manufacturers continue to be plagued by the high dollar and rising energy
> and health care costs, yet most businesses expect manufacturing to stage a
> "slow but steady" recovery in the fourth quarter, a survey released by the
> National Association of Manufacturers finds (Daily Labor Report, page
> A-8).
>
> Industrial output contracted sharply in May by 0.8 percent, marking the
> eighth month in a row that the industrial sector has declined, the Federal
> Reserve says. The chief economist with First Union in Charlotte, North
> Carolina said the 0.8 percent drop was worse than analysts had expected,
> but the utilities decline was the main reason (Daily Labor Report, page
> D-2).
>
> Manufacturing activity plummeted in May, the eighth straight monthly
> decline, crippling hopes that the battered industrial sector's darkest
> days may have passed. With fresh data also released Friday showing
> consumer inflation - outside of soaring energy costs -- pretty much under
> control, the Federal Reserve has leeway to cut interest rates again later
> this month in an effort to prevent industrial weakness from dragging down
> the rest of the economy. Industrial output at the nation's factories,
> mines and utilities fell by 0.8 percent in May, the Federal Reserve
> reported. The drop was double what analysts were predicting and came on
> top of a sharp 0.6 percent decline in April (Jeannine Aversa, Associated
> Press, The Washington Post, June 16, page E1;
> http://www.nandotimes.com/business/story/28593p-494917c.html).
>
> Industrial output fell for the eighth consecutive month in May, and plants
> operated at their slowest rate since 1983, the Federal Reserve said today.
> The Fed's report showed a drop of 0.8 percent in industrial production.
> Analysts had expected a decline of 0.4 percent. the weakness was broad
> based, with the exception of autos. The consumer price index rose 0.4
> percent in May, the Labor Department said, matching expectations. But
> that increase was mostly because of higher energy costs (Reuters, The New
> York Times, June 16, page B4).
>
> The debate inside the Federal Reserve over how much more to reduce
> interest rates has intensified in the past month, although reports of
> benign inflation and a plunge in industrial activity could tip the
> argument in favor of those who favor aggressive cuts. The latest data,
> however, strengthen the majority view among Fed policy makers that
> inflation risks are remote and the economy is still fragile. A big jump
> in gasoline prices drove consumer prices up 0.4 percent in May from April.
> But excluding food and energy, core prices rose just 0.1 percent, the
> lowest since December, helped by a moderation in medical inflation (The
> Wall Street Journal, page A2. The Journal's page 1 graph is of the CPI
> and also the CPI excluding food and energy, 2000 to the present).
>
> Over the last 3 years, Tulare County, California, has paid more than 750
> welfare recipients an average of $1,600 a family to move almost anywhere
> in the country. For Tulare, one of the poorest counties in the country,
> giving welfare recipients a one-way ticket out is one solution to an
> unemployment rate that wavers between 15 and 20 percent. Critics of the
> program, which has expanded to two other counties, say it shows that the
> Central Valley has resigned itself to entrenched poverty, and they fault
> officials for paying to move people without first securing them jobs at
> their chosen destinations (The New York Times, page 1).
>
> While the pay gap between top and bottom employees has long been large in
> Silicon Valley, compensation for top managers is climbing far faster than
> it is for bottom-rung employees. The average pay package for executives
> at the valley's top 150 companies totaled $5.9 million in the fiscal year
> 2000 -- almost double the $3 million average in 1999. Janitors cleaning
> one of the valley company's offices made $18,179 last year, while the
> chief executive made $157.3 million. In April 2000, a Bureau of Labor
> Statistics study of Bay Area workers found their average hourly wage to be
> $22.06 an hour. Professionals with a specialty got much more: $34.82 an
> hour. Service workers averaged much less: $13.61. On the other end of
> the pay spectrum, executives at Silicon Valley's top 150 companies
> averaged $296,716 in base salary, plus $417,854 in bonuses and $5,093,952
> in stock option gains in their companies' fiscal year 2000, according to
> Mercury News research (Shawn Neidorf, Mercury News,
> http://www0.mercurycenter.com/business/top/036474.htm).
>
> DUE OUT TOMORROW: "Regional and State Employment and Unemployment, May
> 2001."
>
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