BUREAU OF LABOR STATISTICS, DAILY REPORT, WEDNESDAY, MAY 15, 2002: RELEASED TODAY: The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.6 percent in April, before seasonal adjustment, to a level of 179.8 (1982-84=100), the Bureau of Labor Statistics reports. For the 12-month period ended in April, the CPI-U increased 1.6 percent. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) also increased 0.6 percent in April, prior to seasonal adjustment. The April level of 175.8 was 1.3 percent higher than the index in April 2001.
Real average weekly earnings decreased 0.7 percent from March to April after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics. A 0.3 percent decline in average weekly hours and a 0.6 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers were partly offset by a 0.1 percent rise in average hourly earnings. Consumer prices jumped by 0.5 percent [seasonally adjusted] in April, the largest increase in almost a year, led by sharply higher costs for gasoline, airfares and hospital services. The advance in the Consumer Price Index, a closely watched inflation gauge, followed a 0.3 percent increase in March, the Labor Department reported today. Excluding volatile energy and food prices, the "core" rate of inflation rose 0.3 percent in April. That followed a 0.1 percent rise in March. In a second report, industrial production at the nation's factories, mines and utilities increased in April for the fourth straight month, rising 0.4 percent, the Federal Reserve reported. The report provides further evidence that the manufacturing sector -- hardest hit by last year's recession -- is on the comeback trail. Production of cars, trucks and auto parts rose a solid 3.1 percent last month. Makers of home electronics saw output rise 0.4 percent. Computer production increased 1.6 percent, while business equipment output edged up 0.1 percent. The latest reading on inflation was a bit worse than many analysts were expecting. They were forecasting a 0.4 percent rise in overall prices, and a 0.2 percent advance in the core rate. (Jeannine Aversa, Associated Press, http://www.nandotimes.com/business/story/402320p-3204003c.html). The Bureau of Labor Statistics says young women in 2000 earned 82 percent of what men earned, compared with 68 percent in 1979 (The Wall Street Journal "Work Week" feature, page B11). Young Americans looking for summer jobs face a soft economy and more competition this year, says The Wall Street Journal's "Work Week" feature (page B11). The seasonally adjusted unemployment rate for workers between the ages of 16 and 19 was 16.8 percent last month, the highest level since 1997. This concerns some economists, who believe young workers pick up good habits for future employment. Meanwhile, employers aren't expected to hire like last year. Based on preliminary data, the National Restaurant Association, whose members are big summer employers, forecasts restaurants will offer an additional 378,700 jobs this summer, down about 15 percent from 445,400 last summer. The forecast for this summer compared favorably to past summers and beats a recent low of 324,400 jobs in 2000. But the association attributes that year's low number to a tight labor market and worker unavailability. The celebrated prosperity of the 1990's brought a surge in the size and value of homes and in family incomes, according to new Census Bureau statistics covering 13 states, including California, Illinois, Indiana, Washington and Wisconsin. Many more Americans earned college and graduate degrees, and the incomes of the elderly jumped about 60 percent. But the data, covering 75 million people, or more than a quarter of the United States population, indicate that the decade's prosperity bypassed many Americans. The poor gained little. Following the overhaul of the welfare system 6 years ago, poverty among single mothers with young children declined. But poverty among all families remained largely unchanged from its 1980 and 1990 levels, an average of 8 percent in the 13 states. To be deemed poor, a family of four in 2000 had an income less than $17,600. Most women's incomes rose in the decade, but men's stagnated or fell. Said Annabel Kirschner, chairwoman of the Department of Rural Sociology at Washington State University in Pullman, along with the poor, unskilled workers fared poorly, with wages failing to keep up with the rate of inflation. Today the bureau released long-form data for Alaska, California, Hawaii, Illinois, Indiana, Oregon, Montana, Wisconsin and the Dakotas. Last week it released data for Mississippi, Nevada, and Washington. Data for other states will be released over the next 3 weeks. New York's and New Jersey's are due on May 20. In round numbers, two-thirds of our population growth in the 1990's was foreign-born, and two-thirds of that was Hispanic, says Max Dieber, director of research services at the Northeastern Illinois Planning Commission in Chicago (The New York Times, page A14). About 18 percent of 600 companies surveyed by Meta Group, Inc., say retaining technology workers is a very serious concern. Two years ago, that share was 37 percent (The Wall Street Journal, "Work Week" feature, page B11). Production by U.S. manufacturing, mining and utilities industries rose for the fourth straight month in April, boosted in part by automakers seeking to keep up with demand, the Federal Reserve said today. With April's gain, the amount of production capacity in use has moved steadily higher after hitting bottom in December 2001. April's rate, while the highest since September, is still well below where economists say it would pose a danger of putting upward pressure on prices (Reuters, http://www.usatoday.com/money/economy/2002-05-15-industrial-production.htm). Last year, after the September 11 hijackings, Congress passed a law requiring that all airport checkpoint screening be conducted by federal workers by this November. Baltimore Washington International airport yesterday became the first airport in the nation to have its private screening firms entirely replaced by federal workers, a process that started May 1. Federal officials say they expect to hire 65,000 security employees for the nation's 429 airports. Starting pay is $23,600. Under the new airport security law, federal screeners must be U.S. citizens, speak English, and have a high school degree or equivalent. Once they meet those minimum requirements, candidates must undergo a daylong evaluation (The Washington Post, page A13; http://www.washingtonpost.com/wp-dyn/articles/A17133-2002May14.html). Economists and social observers have long been intrigued by the tendency of married men to earn significantly more than single men, says Gene Koretz in Business Week's "Economic Trends", May 13, page 32. Some think it's because women tend to select mates with good earning prospects, or because freedom from housework allows husbands to focus more on their jobs. But others, including many conservatives, argue that being married tends to make men more responsible and diligent. A new study in the journal "Economic Inquiry" suggests that the conservatives may have a point. Leslie S. Stratton of Virginia Commonwealth University examined the earnings histories of married men and found that the marital wage premium holds up even after adjusting for age, education, and job experience. Moreover, the pickup in wage growth starts soon after men marry and continues as long as their marriages endure. Merely cohabiting -- living with a woman without being married -- does not have the same effect, the study finds. Cohabiting men do earn more than single men living alone, but their wage advantage is smaller -- about 13 percent compared to 22 percent for married men. Unlike bouncebacks of the past, many jobs lost at American factories may be gone for good, says Business Week (May 13, page 92). The sharp decline in U.S. corporate profits, combined with the burden of a strong dollar, is forcing companies to take a fresh look at how they can cut costs. And in an increasingly global economy, they're deciding it's cheaper to use foreign factories than domestic ones. The result: As U.S. demand rebounds, imports are rising far faster than domestic production. The failure to generate manufacturing jobs at home may already be muting the recovery. The worsening of the trade deficit subtracted 1.2 percentage points from economic growth in the first quarter, the Commerce Department says. This is the first recession since World War II in which productivity has risen, not fallen, says Business Week, May 13, page 96. It cites Bureau of Labor Statistics' data with five points: 1. Nearly 20 percent of the workforce spends more than 49 hours a week at the office -- mostly professional, white-collar workers. 2. Class actions charging that companies are misclassifying to skirt overtime pay are on the rise. 3. The ranks of contingent workers grew 56 percent during the boom -- a just-in-time workforce with no benefits or severance. 4. Companies are paring down staff without reducing workloads. They are also making employees work harder to drum up new business. 5. Pay is increasingly tied to company performance, which saves money when profits evaporate while spurring harder work. DUE OUT TOMORROW: Extended Mass Layoffs in the First Quarter of 2002
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