> BUREAU OF LABOR STATISTICS, DAILY REPORT, JULY 13, 2001:
>
> RELEASED TODAY: The Producer Price Index for Finished Goods declined 0.4
> percent in June, seasonally adjusted, the Bureau of Labor Statistics
> reported today. This decrease followed increases of 0.1 percent in May
> and 0.3 percent in April. Prices for finished goods, excluding energy,
> increased 0.1 percent in June. Prices for finished goods, excluding foods
> and energy, also increased 0.1 percent in June, after registering a 0.2
> percent gain in May. At the earlier stages of processing, prices received
> by producers of intermediate goods inched down 0.1 percent, following a
> 0.1 percent rise in May. The crude goods index dropped 6.0 percent in
> June, after posting a 2.3 percent decrease in the previous month.
>
> Prices at the wholesale level plunged 0.4 percent in June as record
> declines in residential electricity and natural gas prices and a big drop
> in gasoline costs gave the country the best performance on wholesale
> inflation in more than 2 years. The Labor Department reported Friday that
> the drop in its producer price index, which measures prices pressures
> before they reach the consumer, was the first decline since last August,
> and the biggest drop since a 0.5 percent fall in February 1999. Analysts
> had been expecting that inflation would moderate after steep increases
> earlier this year driven by a big jump in energy prices. They also said
> the sharp slowdown in economic activity was helping to ease inflationary
> pressures as wage demands soften with the rising jobless rate. Meanwhile,
> a second report today showed that retail sales rose 0.2 percent in June,
> pushed up by a strong 1.5 percent surge in sales of new cars.
> (Martin Crutsinger, Associated Press,
> (http://www.chicagotribune.com/business/businessnews/article/0,2669,ART-52
> 959,FF.html;
> http://www.usatoday.com/money/economy/2001-07-13-ppi.htm;
> http://www.nandotimes.com/business/story/42224p-662868c.html).
>
> To rake in more revenue, without raising list price, vendors tack on new
> fees, says The Wall Street Journal (July 12, page B1). Why not just raise
> prices and be done with it? Speaking for dry cleaners, the senior vice
> president of The International Fabric Care Institute says "It's more
> marketable" to impose an environmental surcharge than an unexplained price
> increase. Surcharges come under a variety of names. But call it what you
> will, some economists believe surcharges are a hidden force reshaping the
> U.S. economy. "I think prices have gone up a lot more than the Consumer
> Price Index indicates because of these extra charges," says Edward Wolff,
> an economics professor at New York University. Just how much are the
> surcharges adding to the index is unclear. The Bureau of Labor Statistics
> tries to identify these new add-on charges, but John Greenlees, assistant
> commissioner for consumer prices and price indexes, acknowledges that
> retailers surveyed have "no legal obligation to help us."
>
> Consumers, spooked by stock market volatility and massive corporate
> layoffs, flocked to discounters during June, avoiding department stores
> and apparel chains (Associated Press, The New York Times, page C2; The
> Washington Post, page E2).
>
> Small businesses are seeing sales slide as the economy continues to be
> sluggish. About 37 percent of businesses reported sales were down in the
> past 3 months, compared with only 23 percent that saw sales go up,
> according to the June monthly report by the National Federation of
> Independent Business. The remaining businesses reported no change (The
> Wall Street Journal, page B7).
>
> The all-settlements weighted average first-year gain in newly bargained
> contracts reported in the first half of 2001 was 4.5 percent, compared
> with 3.9 percent in the first half of 2000. The second and third-year
> weighted average increases in agreements reported in the first 6 months of
> 2001 were 3.7 percent and 4.1 percent, respectively, compared with second
> and third year gains of 3.4 percent reported in the first 6 months of
> 2000, according to the data compiled by the Bureau of National Affairs
> (Daily Labor Report, page D-3).
>
> New claims flled with state agencies for unemployment insurance benefits
> soared to 445,000, the highest level since 1992, marking an increase of
> 42,000 from the previous week's revised average of 403,000, the Labor
> Department's Employment and Training Administration says. The 4-week
> moving average of initial UI claims was 410,750, an increase of 2,500 from
> the previous week's revised average of 408,250 (Daily Labor Report, page
> D-1; The Washington Post, page E2; Reuters, The New York Times, page C2).
>
> Early indications suggest the job market worsened in July, although import
> prices dropped last month, helping to keep inflation pressures contained.
> The Labor Department said initial claims for unemployment rose a
> seasonally adjusted 42,000 to 445,000, following an increase of 12,000 the
> week before (The Wall Street Journal, page A2).
>
> The quarterly business outlook index from the Manufactures Alliance/MAPI
> signaled that the factory recession is likely to continue into the fall.
> After plunging to 34 percent in the first quarter, its lowest in nearly 30
> years, the survey ticked up to 35 percent in the second quarter. That
> signals that the factory sector contraction is continuing, but not getting
> worse (USA Today, page 1B).
>
> The economic slowdown is taking a toll on older workers, who are reporting
> a surge in age discrimination in layoffs and hiring, says USA Today (page
> 1B). Nearly 60 percent of executives believe age discrimination in hiring
> has increased during the past 5 years, according to a July survey by
> ExecuNet. "Now that the economy is softening, you're seeing more
> complaints being raised because it's even tougher to fight," says the CEO
> of the Norwalk, Conn. based career management network. "We're seeing a
> lot of people experiencing age discrimination for the first time."
> Charges of age discrimination filed with the Equal Employment Opportunity
> Commission incrased from 14,000 in fiscal year 1999 to 16,000 last year.
> And that pace continued through the first half of 2001, with age claims
> making up 22.5 percent of total charges.
>
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