[PEN-L:599] BLS Daily Report

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BLS DAILY REPORT, MONDAY, OCTOBER 19, 1998:

__A sharp fall in energy prices kept the September CPI-U steady.
September was the first month the CPI-U showed no increase since March.
The price index rose 0.2 percent in August.  In the year ended in
September, the CPI-U has risen at a 1.5 percent rate. ... (Daily Labor
Report, page D-1; New York Times, Oct. 17, page B2).
__Inflation disappeared in September, as prices for gasoline, clothing,
and vegetables all fell.  The seasonally adjusted CPI was unchanged,
following five small increases from April through August. ...
(Washington Post, Oct. 17, page G1).  

Annual increases in Social Security payments aren't keeping pace with
inflation on the goods and services on which senior citizens spend much
of their money.  Although inflation in general remains at low levels,
America's elderly are subject to a different and slightly higher, rate
of consumer-price increases, according to the Labor Department.  The
agency has maintained a separate consumer price index for the elderly,
or "CPI-E" since 1982, releasing it each month without much fanfare.
Unlike the conventional CPI, the senior-citizen formula places greater
weight on the cost of such goods and services as medical treatment,
prescription drugs, and housing.  Though experimental, the CPI-E is
considered a more accurate reflection of the cost of living for
Americans over the age of 61.  Between August 1997 and August 1998, for
instance, the CPI-W rose 1.3 percent, while the CPI-E rose 1.7 percent,
due to rising health costs. ... A lobbyist for the American Association
for Retired Persons says, "We definitely want the cost of living
adjustments (in Social Security) to be based on a more reasonable
reflection of what the elderly really face". ... Using the senior
citizen CPI would "make more sense," says Patrick Jackman, BLS economist
who oversees the CPI-E.  "There's been some talk about producing an
official CPI for the elderly, but that would cost money." Mr. Jackman
estimates that it would cost the Labor Department an extra $40 million
per year to produce a separate report. ... (Wall Street Journal, page
A2).

__Real average weekly pay fell 0.6 percent from August to September,
after seasonal adjustment, BLS reports, saying the decline stemmed from
a 0.6 percent decrease in average weekly hours and a 0.1 percent rise in
the CPI-W. ... (Daily Labor Report, page D-14).
__As the economy slowed, average weekly earnings for workers fell in
September by the biggest amount in 17 months. ... (New York Times, Oct.
17, page B2).  

The Social Security Administration announced that Social Security
recipients will receive a 1.3 percent cost of living increase for the
coming year - the lowest in 11 years. ... (Daily Labor Report, page A-9;
Washington Post, Oct. 17, page G1; New York Times, Oct. 17, page A9). 

In another sign of a slowed economy, U.S. industrial production fell 0.3
percent in September,  according to data released by the Federal
Reserve.  The decrease follows a revised 1.6 percent increase in August
- originally pegged at 1.7 percent - which was a rebound in output after
the General Motors strike.  "The declines were widespread in durable
manufacturing, with larger drops in steel and motor vehicles and parts,"
the Fed said. ... (Daily Labor Report, page D-18; Washington Post, Oct.
17, page G1)_____Analysts had been expecting an increase of  0.1 percent
in industrial production. ... (New York Times, Oct. 17, page
B2)_____U.S. industrial output dropped unexpectedly by 0.3 percent in
September, wrapping up the most sluggish quarter for production since
the last recession. ... (Wall Street Journal, page A28).

Little by little, across the economy, companies large and small are
pulling in their horns, crimping spending plans, cutting back on
employment. ... But the chief economist for the U.S. Chamber of Commerce
says that so far job losses have been concentrated in areas most
directly affected by the Asian financial crisis - manufacturing,
exporting, and financial services. ... According to personnel management
consultant Challenger, Gray & Christmas Inc., announcement of job
cutbacks in September were double what they were in August and more than
triple the rate in September 1997.  "The pace of layoffs is jumping
because profits are being squeezed," said the company's chief executive.
Even so, there are few signs of distress yet in macro labor market
figures.  Although September's unemployment rate was 4.6 percent
compared with 4.5 percent in August, the difference was actually
statistically insignificant.  "It ends up that the rate was right on a
rounding point," said Philip Rones, BLS assistant commissioner for
current employment.  the rate went up by two hundredths of a percentage
point; when the rate was rounded up, it appeared to be a bigger
increase, said Rones.  "Really, there's no uptick". ... "The great
American job machine is not broken," said an  economist for the
Conference Board. ... One area of the economy in which there is a
clearly evident loss of jobs is in manufacturing.  "The thing that jumps
out in these numbers is the turnaround in manufacturing," said Rones.
....  Rones continues:  "One thing we see in our unemployment statistics
is that, in general, among the people who say they've lost their jobs,
fewer are in the temporary layoff category than used to be". ...
(Washington Post, October 18, page H1).

The University of Mchigan's index of consumer confidence fell to 98.9
this month, from 100.9 in September. ... (New York Times, Oct. 17, page
B2; Wall Street Journal, page A2).

DUE OUT TOMORROW:  Regional and State Employment and Unemployment:
September 1998  (For release in the afternoon rather than at 10:00 a.m.)


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