> BUREAU OF LABOR STATISTICS, DAILY REPORT, JULY 11, 2001:
>
> Sales at wholesalers fell in May and inventories rose more than at any
> time in the last 6 months, a sign that businesses may be reluctant to
> order more goods until the economy picks up. Wholesale inventories rose
> 0.2 percent, led by an increase in stockpiles of drugs, food and clothing,
> after increasing 0.1 percent in April, the Commerce Department reported
> today. Sales fell 0.1 percent, the third drop in the last 4 months. That
> pushed the inventory-to-sales ratio, a measure of the time goods remain
> unsold, up to 1.32 months in May, the highest level since April 1999. As
> a result, wholesalers are struggling to keep stockpiles in line with
> sluggish demand. The report "isn't good news for the economy, because it
> suggests continued weak production as companies work off the inventory
> glut," says the chief economist at Briefing.com in Boston. Wholesalers
> account for about one-quarter of all business inventories. Retailers and
> factories account for the rest (The New York Times, page C12).
>
> Producer prices of finished goods in June probably remained unchanged
> after rising 0.1 percent in May, when the June index is released by BLS
> Friday. Excluding the volatile food and energy categories, prices
> probably rose 0.1 percent in June, after advancing 0.2 percent in May
> (Business Week, July 16, page 96).
>
> Retail sales are expected to have grown 0.2 percent in June, after growing
> 0.1 percent in May when the new figures are released Friday, says the S&P
> MMS survey. Excluding vehicles, June sales are expected to have grown by
> a similar 0.2 percent, after advancing 0.3 percent in May. Retail sales
> in April and May were helped by high gasoline prices, which are now
> falling in response to cheaper crude-oil prices (Business Week, July 16,
> page 96).
>
> Export prices in June are expected to slip 0.1 percent, while import
> prices are expected to remain unchanged, when they are announced tomorrow.
> In May, export prices fell 0.3 percent, with an identical rise in import
> prices. The continued strength of the dollar has made imports cheaper and
> exports more expensive for the rest of the world (Business Week, July 16,
> page 96).
>
> The United States economy is getting a boost from an unexpected source:
> falling energy costs, says David R. Francis, Christian Science Monitor
> (http://www.nandotimes.com/business/story/41054p-648441c.html). Prices of
> oil, gasoline, and natural gas, whose upward spike 2 years ago helped
> bring a record economic expansion to a stall, are now falling -- helping
> the U.S. economy avert a possible recession. Add the impact of lower
> interest rates, coming tax rebates, and an upturn in stock prices, and
> some economists now see modest growth in the year's second half, up from
> nearly zero this spring. In effect, cheaper energy acts like a tax cut,
> fattening consumer wallets.
>
> Economic forecasts indicate that while the slumping U.S. economy won't
> slide into recession, it is enduring a "flat spot" that will last longer
> than originally predicted before growth finally rebounds sometime next
> year, says St. Louis Federal Reserve Bank President William Poole. Poole
> stressed in an interview with USA TODAY that he was merely repeating the
> consensus forecast, not making one of his own. Poole noted that the
> consensus forecast has slipped since late last year, when analysts
> expected a significant rebound in the second half of this year. Now,
> analysts forecast a lackluster economy for the rest of this year and
> predict "a real resumption of growth won't occur until next year," he said
> (USA Today, page 2B).
>
> DUE OUT TOMORROW: U.S. Import and Export Price Indexes -- June 2001
>
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