BLS DAILY REPORT, FRIDAY, OCTOBER 8, 1999
RELEASED TODAY: Payroll employment was essentially unchanged in September,
and the unemployment rate remained at 4.2 percent. Employment declined in
manufacturing and retail trade, and the services industry added relatively
few jobs over the month. Average hourly earnings rose by 7 cents in
September, following a 2-cent increase in August. ...
Because the government's broadest measure of private industry pay excludes
stock options as well as other increasingly popular flexible schemes, the
measure could be understating the annual increase in employers' compensation
costs, according to a research paper recently published by the Federal
Reserve. The four Fed economists who wrote the paper found that the
exclusion of stock options alone from the employment cost index (ECI) could
cause the index to understate the rise in private industry compensation by
as much as 0.3 percentage point, measured on a 12-month basis. The ECI,
compiled by BLS, is widely used by private analysts and policymakers,
including those at the central bank. The research paper looked at the ECI
measure of private industry compensation -- which tracks changes in
employers' costs of both wages and benefits. The Fed paper also looks at
BLS's measure of total compensation per hour, which is part of its quarterly
productivity report, and finds somewhat different measurement issues related
to newer pay schemes. ... The Fed paper is entitled "Recent Trends in
Compensation Practices". ... For its part, BLS is researching the
increasing frequency of stock options as it looks at measurement issues
related to the ECI and its other major data series, officials said. John
Ruser, chief of BLS's compensation research group, told the Bureau of
National Affairs that the Fed paper's estimate of a possible 0.3 percentage
point understatement in compensation cost increases "might be a heroic
assumption" given the uncertainty about how widespread the use of stock
options is across private industry establishments. "That's why we are
fielding an incident survey," Ruser said, describing a current project of
the agency. ... Excluded from the ECI survey are stock options. Also
excluded are many types of targeted pay, such as hiring, retention, and
referral bonuses. In the ECI, these are considered to be recruiting costs
rather than labor costs. ... (Pam Ginsbach in Daily Labor Report, page
D-1).
Unemployment insurance claims filed with state agencies climbed to 312,000
in the week ended Oct. 2, an increase of 10,000 over the previous week's
figures, the Employment and Training Administration of the Department of
Labor announces. ... (Daily Labor Report, page D-1; Washington Post, page
E2)_____First-time claims for unemployment insurance rose to their highest
level in 2 months, though many economists expect the numbers to recede after
a surge cause by Hurricane Floyd. ... (Wall Street Journal, page A2).
Retail sales rose modestly in September as the robust U.S. economy continued
to encourage shoppers to spend despite volatility in the stock market,
stormy weather, and rising interest rates. Hurricane Floyd, which battered
the East Coast in the middle of last month, boosted sales of discounters and
home improvement stores -- which benefited from shoppers' stockpiling of
everything from flashlights to food. ... (Washington Post, page
E2)_____Retail sales at stores open for more than a year rose in September,
as shoppers bought fall fashions and back-to-school supplies. ... (New York
Times, page C2)_____Not even Hurricane Floyd could keep Americans from
continuing their shopping spree last month, as a flurry of consumer spending
helped retailers produce better-than-expected sales for September. Most
retailers produced healthy sales for the month as the weather, economy, and
interest rates generated few concerns among consumers. ... (Wall Street
Journal, page B4).
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