[PEN-L:1571] BLS Daily report

[Richardson_D]

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BLS DAILY REPORT, MONDAY, DECEMBER 14, 1998

Producer prices for finished goods fell 0.2 percent, seasonally adjusted, in
November, yet another sign that wholesale inflation is absent, Labor
Department data show.  The November price decrease followed 2 months of
price advances.  Producer prices rose 0.2 percent in October, after an
unusually large 0.3 percent September advance.  In the year ended in
November, however, producer prices declined 0.7 percent, after a 1.2 percent
decrease throughout 1997.  Prices remained subdued in the so-called
inflation pipeline, with the cost of intermediate goods dropping 0.2 percent
and crude goods dropping 1.4 percent in the year ended in November. The
price of intermediate goods has slipped 2.9 percent, while crude good costs
have plunged 19 percent. ...  "The decline in finished energy prices is one
of the major reasons the overall finished goods index fell in November,"
BLS economist Joseph Kowal said. ...  (Daily Labor Report, page D-1).
 
Retail sales rose 0.6 percent in November, stronger than analysts were
expecting, Department of Commerce data show.  Economists had expected sales
to be soft for the month, in part because unit motor vehicle sales for
November were weak and because warmer-than-normal temperatures were reported
to have hurt apparel sales. ...  (Daily Labor Report, page D-9).

Shoppers opened the holiday season last month by spending freely at
department stores and auto showrooms. ...  Meanwhile, prices paid to
producers such as factories and food-processing plants declined, pulled down
by big drops in the cost of gasoline and food. ...  (AP story by Dave
Skidmore in Washington Post, Dec. 12, page D3)_____Retail sales surprisingly
strong and producer prices fall again. ...  (Bloomberg News story in New
York Times, Dec. 12, page B2)_____ Better-than-expected November sales,
buoyed by a surge in the auto sector, suggest that retailers may be in for a
merry Christmas after all. ...  A sharp drop in energy prices and the
largest decline in food costs since June 1997 continues to keep inflation at
bay  (Alejandro Bodipo-Memba in Wall Street Journal, page A12).

Outflows of foreign direct investment from rich to poor countries are having
only a limited negative impact on employment in source economies, according
to the Bank for International Settlements. ...  "Fears that jobs are being
destroyed in the industrialized countries when multinational enterprises
invest in low-wage countries are only in part supported by the evidence,"
according to a working paper prepared by the bank. ...  The authors point
out that because of the low degree of substitution between employees in
parent companies and their affiliates abroad, even where there may be some
displacement of home-country workers due to Foreign Direct Investment, "such
effects are likely to have been only moderate" ...  (Daily Labor Report,
page A-9).

DUE OUT TOMORROW:  
     Consumer Price Index -- November 1998
     Real Earnings:  November 1998


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