> BLS DAILY REPORT, MONDAY, MAY 10, 1999:
>
> Nonfarm payroll employment grew by a healthy 234,000, seasonally adjusted,
> in April, as hourly earnings continue to increase, but at a reduced rate.
> The nation's jobless rate edged up a statistically insignificant 0.1
> percentage point to 4.3 percent, according to BLS' separate survey of
> 50,000 households. Even with this strong job growth and low unemployment,
> however, average hourly earnings rose just 3.2 percent in the year ending
> in April, the lowest year-over-year increase since BLS logged a 3 percent
> gain in March 1996. "We have the lowest increase in average hourly
> earnings in 3 years at the same time the unemployment rate has fallen
> substantially," says the chief economist at the Federal National Mortgage
> Association. "While the service sector depends largely on labor for
> economic growth," according to the president of the National Association
> of Manufacturers, manufacturing provides more productivity for growth.
> ...manufacturing provides about 18 percent of the total hours Americans
> work, but accounts for nearly 60 percent of our technological advances"
> (Daily Labor Report, page D-1; BLS Commissioner Katharine Abraham's
> Statement on Release of the April Employment Report, page E-1).
> __The nation's unemployment rate ticked up to 4.3 percent last month, as
> the pool of available labor grew faster than the number of jobs. But
> joblessness among blacks dipped to 7.7 percent, the lowest level sine
> 1972, when such separate figures were first kept. For just over a year,
> the unemployment rate has bounced between 4.2 percent and 4.5 percent as
> the economy has grown rapidly. A combination of labor force growth and
> large productivity gains have kept the strong growth from causing a sharp
> decline in joblessness that might have sparked a round of inflationary
> wage increases. Last month, average hourly earnings rose only 3 cents to
> $13.11, which was just 3.2 percent higher than in April 1998. That hourly
> figure does not include either bonuses or non-cash compensation such as
> employer paid health insurance premiums. Nevertheless, workers' pay was
> rising faster than consumer prices, which rose less than 2 percent over
> the same period (John M. Berry, writing in The Washington Post, May 8,
> page E1).
> __America's jobs boom is increasingly pulling many of the nation's most
> vulnerable citizens out of poverty and unemployment, Sylvia Nasar writes
> in The New York Times (May 8, page B1). The unemployment rate has now
> been at or below 4.5 percent for slightly more than a year, and at or
> below 5 percent for a full 2 years. Investors, who were a bit rattled on
> Thursday by a warning from Fed Chairman Greenspan that the tight labor
> market still posed an inflationary threat, generally took the strong April
> job growth in stride. That was mostly because the report showed no signs
> that wages were accelerating. The most striking feature of yesterday's
> report was how broadly the benefits of economic growth are being spread.
> Joblessness among workers who have long suffered the highest unemployment
> rates continued to decline.
> __Despite continued job growth and almost record-low unemployment in April
> wage pressures remain remarkably dormant. Economists continue to marvel
> at how employers, despite an ever-tightening labor pool, continue to be
> able to avoid raising wages to both recruit and retain workers. In many
> cases, businesses are offering stock and stock options instead, according
> to a Federal Reserve survey. On the one hand, a lack of wage pressure is
> a good thing for the economy. On the other hand, "Since this is the most
> favorable labor market that workers are likely to see for some time...the
> current rate of wage growth does not bode well for future living
> standards," says Dean Baker, an economist with the Preamble Center for
> Public Policy, a Washington think tank (The Wall Street Journal, page A2.
> The Journal's page 1 graph is of the unemployment rate, 1997 to the
> present).
>
> The Wall Street Journal's feature "Tracking the Economy" (page A6) shows
> that the Technical Data Consensus Forecast for nonfarm productivity for
> the first quarter, to be released by BLS tomorrow, at 2.9 percent,
> compared to the previous actual figure of 4.2 percent. Producer prices
> for April, to be released Thursday, are predicted to be at 0.2 percent,
> the same increase in March. Consumer prices for April to be released
> Friday are predicted to rise 0.1 percent, in contrast to the increase of
> 0.4 percent for March.
>
> Business executives who run some of the largest U.S. companies are
> counting on future productivity gains linked to technological innovations
> to keep the U.S. economy on its path of stable expansion. Members of the
> Business Council met in Williamsburg, Va. The official forecast of the
> council's advisors, who are chief economists of the corporations, pegged
> inflation-adjusted gross domestic product at a growth rate of 2.8 percent
> in 1999, measured from the fourth quarter of 1998. That would be down
> from the 4.3 percent gain posted in the 1997-98 period. Even with slower
> expansion, however, the unemployment rate should stay close to its current
> level. Looking out just 6 months, the council members were unanimous in
> believing that their power to make price increases stick will remain
> soft. Assessing the wage side of inflation, the CEOs said they expect
> moderation to continue. Federal statistical agencies have acknowledged
> that they are looking for ways to measure new compensation schemes,
> especially those related to bonuses and stock options or stock ownership.
> As it continues to reorganize its compensation data programs, BLS plans to
> conduct surveys of employers that should help the agency better measure
> newer pay packages. Nonwage compensation trends are not the only areas
> where there are data measurement problems, some council members said. The
> Eastman Kodak Co. CEO argued that the strong productivity performance of
> U.S. business in recent quarters is grossly under estimated in official
> government figures because economists do not know how to measure the vast
> and diverse services sector that has been changed by computers and the
> Internet (Daily Labor Report, page A-10)
> __If the nation's top corporate executives could deliver a message to
> Federal Reserve Chairman Greenspan, it would be this: "We've whipped
> inflation, for now" (The Wall Street Journal, page A24)..
>
> A new study by the conservative Heritage Foundation concludes that the
> sharp decline in the number of families on the welfare rolls is due almost
> entirely to tough state policies, enacted as part of national welfare
> reform legislation -- and not the economic good times and plummeting
> unemployment rate. Many of the states with the highest unemployment rates
> have had the greatest success in trimming their welfare rolls, while other
> states with low unemployment rates have relatively large welfare rolls.
> Tough action by states in cutting off welfare checks for violating the
> rules and requiring recipients to go to work immediately, were much more
> important factors. Robert Rector, senior policy analyst of The Heritage
> Foundation, says welfare reform should be judged by how many people leave
> the system. The traditional welfare system was misguided because it was
> preoccupied by eradicating poverty, he said. "Poverty should not be the
> principal concern," Rector said. "Dependency and illegitimacy are the most
> harmful things" Accompanying the article is a table showing the caseload
> reduction, by state, and the unemployment rate of that state. Source of
> the data is given as The Heritage Foundation (The Washington Post, page
> A2).
>
> "The market is in a snit," was the way one analyst put it at the end for
> the week after an uptick in the April jobless rate and a very small
> increase in average hourly wages were not enough to cause a rally. There
> was widespread misinterpretation of a speech by Federal Reserve Chairman
> Alan Greenspan in which he emphasized that large productivity gains are
> keeping costs and inflation low. Most analysts seized, instead, on his
> usual warnings that a continued drop in unemployment could cause inflation
> problems. In fairness, prices haven't been helped by all the private bond
> issues coming to market (The Washington Post, May 9, page H2).
>
> The rise in expenditures on prescription drugs has been outpacing, by far,
> that of health-care spending overall, according to a graph included with
> an article on changed in Washington, D.C. health insurance curbs. Percent
> changes in spending, per person, are shown as 2.6 percent for all health
> spending, with prescription drugs changing 6.6 percent during 1998-99 (The
> Washington Post, May 9, page H1).
>
application/ms-tnef
