> BLS DAILY REPORT, TUESDAY, MAY 11, 1999:
>
> Today's News Release: "Productivity and Costs: First Quarter 1999"
> indicates that the annual rates of productivity change -- as measured by
> output per hour of all persons -- for the first quarter of 1999 were 4.7
> percent in the business sector and 4.0 percent in the nonfarm business
> sector. The data is preliminary. These productivity gains resulted from
> a combination of strong output growth and modest increases in hours of all
> persons. In manufacturing, productivity changes in the first quarter
> were: 5.8 percent in manufacturing; 8.2 percent in durable goods
> manufacturing; and 2.4 percent in nondurable goods manufacturing.
>
> The Wall Street Journal's feature "Tracking the Economy" (May 10, page A6)
> shows that the CPI for April, to be released Friday, is predicted to rise
> .2 percent. It rose .2 percent in March, as well.
> __Falling energy prices, cheap imports, docile workers and the plunging
> price of computer power aren't the only reasons the U.S. inflation rate is
> falling. Changes in the way the government calculates the CPI also
> account, to a significant degree, for the poky pace of inflation. As
> measured by the CPI, the inflation rate has fallen from above 3 percent in
> 1991 to less than 2 percent in the past 12 months. Had BLS used the same
> yardstick in each of those years, the inflation rate would be down, but
> the difference wouldn't be so sharp. In the last 12 months, the prices of
> the basket of goods and services in the CPI rose by 1.9 percent. But had
> changes to the index not been made over the last 4 years, prices would
> have risen approximately 2.0 percent, according to BLS. Robert J. Gordon,
> professor of economics at Northwestern University, estimated in a recent
> article that the CPI would have been 0.73 percentage points higher in 1998
> if calculated using 1992 methods. Thus far, BLS hasn't restated
> historical data, so comparing today's inflation rate to the inflation rate
> reported for 1992 is misleading. The agency is currently compiling data
> for researchers that will allow them to compare the changes in the CPI
> dating back to 1978
> on an apples to apples basis. The new data are expected to be available
> this summer (The Wall Street Journal, page A2).
>
> The national retail price for unleaded gasoline increased during the past
> week to $1.140 a gallon, putting the price more than 10 cents above year
> earlier levels, the Department of Energy said. Based on its survey of 800
> stations, the DOE said the price for gasoline at the pump rose from $1.136
> from May 3 to $1.140 on May 10. Fuel costs were predicted to rise
> throughout the month, according to a DOE forecast that said summer
> gasoline prices will peak in May at $1.18 a gallon and then average $1.13
> for the season (The Washington Post, page E13).
>
> In Europe, there's no longer much stigma attached to being out of work,
> says The New York Times (May 9, page WK 5). While America's economy is
> booming, the economies of Japan and Europe are stagnating. Then some
> other countries have generous unemployment benefits. In Sweden, where the
> unemployment rate has jumped from a minuscule 1.4 percent to 5.6 percent
> in the last decade, unemployed workers can collect nearly 80 percent as
> much as if they were working, compared with about 50 percent in the United
> States and Japan. In Spain, it's 70 percent (until recently it was 90
> percent) and in France it's nearly 60 percent. While in the United States
> and Japan, an unemployed worker can collect unemployment benefits for 26
> weeks, in Britain unemployed people can collect practically forever.
> Accompanying charts show the America has one of the world's lowest jobless
> rates, and creates jobs faster than Europe and Japan, especially among
> younger workers and women. One reason is that there is no incentive to
> remain unemployed for long in the United States. And American companies
> also find it cheaper to hire workers than their European counterparts.
> Among the sources of data is BLS.
>
> Setting up an employee stock ownership plan improves companies financial
> performance, not just staff morale, according to a new study of the plans
> by Hewitt Associates, a consulting firm based in Lincolnshire, Ill. The
> study examined the performance of all 382 publicly traded companies that
> adopted such plans, known as ESOP's from 1971 through 1995. The average
> company in the study improved the annual return on its stock by 6.9
> percentage points and the return on assets by 2.7 percentage points after
> establishing its plan. An ESOP acquires or is granted significant
> holdings of company stock on employees' behalf. The director of the
> National Center for Employee Ownership says "ESOP's are almost never a
> substitute for compensation," noting that wages at companies with the
> plans are typically 5 to 12 percent higher than industry averages.
> Nevertheless, he says, publicly traded companies were turning away from
> ESOP's in favor of granting stock options, because of more favorable
> accounting treatment (The New York Times, May 9, page BU5).
>
>
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