> BUREAU OF LABOR STATISTICS, THURSDAY, JUNE 21, 2001:
>
> Because productivity growth melts away problems of inflation, budget
> deficits, unemployment and stagnant income, there is great interest in
> knowing whether the upturn reported by the Bureau of Labor Statistics
> since the mid-1990's will persist. Thus the 1.2 percent decline in
> productivity last quarter, if it is more than a cyclical blip, is
> worrisome, writes Alan B. Krueger, Bendheim Professor of Economics and
> Public Affairs at Princeton University and editor of The Journal of
> Economic Perspectives, in "Economic Scene" (The New York Times, page C2).
> "But can the numbers be trusted?" he asks. New research from economists
> at the Bureau of Labor Statistics and the Bureau of Economic Affairs
> presented at the Federal Economic Statistics Advisory Committee meeting in
> Washington this month suggests that one potential problem with the
> statistics -- the measurement of hours worked -- is much less of a problem
> than previously believed. Even small differences matter, so accuracy is
> crucial. Production grew at an annual rate of 2.7 percent from 1947 to
> 1975, then mysteriously slowed to 1.4 percent for 1975 to 1995, before
> rebounding to 2.8 percent after 1995. If productivity had grown at the
> higher rate all along, national income would be 30 percent greater today.
> In principal, labor productivity is easy to measure -- simply divide
> economic output by the number of hours used to produce it. There are only
> two problems: the numerator and the denominator. Most attention has
> focused on the numerator. Economic output is notoriously hard to measure
> because the quality of goods changes constantly and because new goods are
> periodically introduced. But others criticize the measurement of hours
> worked. Most recently Morgan Stanley's chief economist has argued that
> the Bureau of Labor Statistics undercounts the hours people work because
> employees increasingly perform work after hours on cell phones, beepers
> and home computers. A team of four researchers from BLS and the Bureau of
> Economic Affairs, led by Marilyn E. Manser, head of the Office of
> Productivity and Technology, has investigated his hypothesis. It came up
> lacking. Usually it is not newsworthy when government statistics turn out
> to be accurate. It is just reading tea leaves to forecast from currently
> available data whether the takeoff in productivity growth in the 1990's
> has evaporated. Still, the latest research suggests the productivity tea
> leaves are worth reading.
>
> Federal Reserve Board chairman Alan Greenspan said yesterday that
> inflation remained modest, though bore careful watching, while consumer
> confidence appeared to be holding up despite a rash of layoffs. At the
> same time, the New York-based Conference Board said its index of leading
> economic indicators improved in May. It predicted slow growth during the
> next several months. During testimony before the Senate Banking
> Committee, Greenspan offered a mixed picture of U.S. business. He warned
> there were signs of declining asset quality within the banking industry.
> He also said he expected better figures for U.S. productivity, a key
> indicator of the economic growth, in the second quarter of the year.
> Productivity fell in the first 3 months of 2001, after years of rapid
> increase. Asked about the possibility for accelerating inflation,
> Greenspan acknowledged that energy and labor costs had been increasing.
> He added that he saw "no evidence that those costs were being passed
> through into final prices in any material way" but were squeezing
> corporate profit margins. Greenspan said that despite increasing layoffs,
> consumers still "exhibited a fairly high degree of confidence. To be
> sure, consumer expenditures have not been going up in any material way,
> but the have held their own." Consumer spending makes up nearly
> two-thirds of the economy (Sue Kirchhoff, Boston Globe staff,
> http://www.boston.com/dailyglobe2/172/business/Fed_chief_reports_inflation
> _modest+.shtml 6/21/01).
>
> The index of leading economic indicators climbed 0.5 percent in May,
> suggesting the slowdown might end in the near future, according to the
> Conference Board. The rise marked the second straight increase in the
> leading indicators, a sign that "the U.S. economy might be poised for some
> recovery," the Conference Board economist says (Daily Labor Report, page
> D-1; The Washington Post, page E2; The New York Times, Reuters, page C3).
>
> The U.S. trade deficit narrowed in April, as Americans cut back on
> purchases of foreign-made goods, including TVs, toys, and
> telecommunications equipment. The Commerce Department reports that the
> trade imbalance shrank by 2.7 percent in April to $32.2 billion. The
> March deficit, however, was even bigger than the government previously
> estimated, mushrooming to $33.1 billion, according to revised figures. In
> April, exports of goods and services fell by 2 percent to $86.9 billion,
> while imports declined by 2.2 percent to $119.1 billion. Another factor
> contributing to the slimmer deficit: The average price for a barrel of
> imported crude oil in April dipped to $21.65, the lowest since November
> 1999 (Jeannine Aversa, The Associated Press,
> http://www.washingtonpost.com/wp-dyn/articles/A27642-2001Jun21.html;
> http://www.chicagotribune.com/business/businessnews/article/0,2669,ART-525
> 66,FF.html; http://www.nypost.com/apstories/business/V9465.htm;
> http://www.nandotimes.com/business/story/30489p-522016c.html).
>
> No one has exact figures, but some estimates put the number of senior
> citizens who travel and work in RVs for part or all of the year, at around
> 750,000. These seniors are, in essence, forging their own alternative
> lifestyle, complete with support networks -- from RV associations to
> magazines and Internet sites that post job listings targeted at their age
> group. In the process, these older Americans are helping redefine
> retirement -- and what retirees want from it. Increasingly, these older,
> mobile workers are being sought out by employers across the country, who
> say they value these employees because they bring to their work
> experience, stability, commitment, and a strong work ethic. Among those
> employers targeting seniors are guest ranches, theme parks, traveling fair
> contractors, private campgrounds, public parks, and tour operators. In
> addition to salaries of $6 or $7 an hour, they offer perks, such as free,
> or extremely inexpensive RV hook-ups, including all utilities; free guest
> passes to area attractions; special events, such as picnics, and extra
> incentives, such as gas money, for working an extended contract. For some
> senior citizens, seasonal work is a way to supplement their Social
> Security income (Christian Science Monitor, June 18, page 15).
>
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