> BLS DAILY REPORT, FRIDAY, MAY 14, 1999
>
> RELEASED TODAY:
> CPI -- The CPI-U rose 0.7 percent in April on a seasonally adjusted
> basis. This was the largest monthly advance since an increase of the same
> magnitude in October 1990. About half of the CPI-U advance was
> attributable to a record increase in gasoline prices. Overall energy
> costs rose 6.l percent; the index for petroleum-based energy increased
> 14.0 percent, while the index for energy services decreased 0.1 percent.
> The food index, which declined 0.2 percent in March, increased 0.1 percent
> in April. ... Excluding food and energy, the CPI-U increased 0.4 percent
> in April, following increases of 0.1 percent in each of the first 3 months
> of 1999. The acceleration in April reflects sharp upturns in the indexes
> for apparel and for tobacco and smoking products, coupled with a larger
> increase in shelter costs. ...
> REAL EARNINGS -- Real average weekly earnings decreased by 0.2 percent
> from March to April after seasonal adjustment. A 0.3 percent increase in
> average weekly hours and a 0.2 percent gain in average hourly earnings
> were offset by a 0.7 percent increase in the CPI-W. ... After adjustment
> for inflation, average weekly earnings grew by 1.0 percent from April 1998
> to April 1999. ...
>
> A hefty leap in energy prices sent wholesale prices soaring in April, BLS
> data show, but economists saw little cause for immediate concern, noting
> that most other producer prices remained steady during the month.
> Seasonally adjusted data reveal a 0.5 percent jump in the producer price
> index for finished goods, more than double the 0.2 percent gain logged in
> March and well ahead of the 0.4 percent decline posted in February. But,
> if a near-30 percent surge in gasoline prices is excluded from the mix,
> the PPI actually slipped 0.1 percent during the month. ... The Fed is not
> worried about the pop-up in energy prices, according to a vice president
> and economist with First Union National Bank in Charlotte, N.C. He
> predicted that energy prices will soften a bit once the bombing in
> Yugoslavia stops. Most economists predict that the central bank will hold
> short-term interest rate targets steady at the upcoming policy-setting
> meeting May 18. ... (Susan McInerney in Daily Labor Report, page D-1).
>
> Retail sales were nearly flat in April, edging up just 0.1 percent after
> an equally modest increase in March, the Commerce Department reported.
> The increase was weaker than analysts had expected. ... (Daily Labor
> Report, page D-9).
>
> __A record spike in gasoline prices reported by BLS masked wholesale
> trends in U.S. inflation and retail sales during April, as the economy
> kept its even keel at the start of the second quarter. The two reports
> braced financial markets, sending bond and stock prices higher on hopes
> that the Federal Reserve policymakers meeting next Tuesday would see no
> need to raise interest rates to sustain steady, low-inflation growth. ...
> The "core" PPI, which excludes volatile food and energy costs, rose just
> 0.1 percent in April after a flat reading in the previous month. Gasoline
> prices shot up last month by 29.1 percent, the largest increase on record,
> but food prices fell. ... (Glenn Somerville in Washington Post, page E3).
> __The economy continues to grow with few signs of accelerating inflation.
> Retail sales rose 0.1 percent in April, matching March's increase. ... A
> separate Labor Department report dispelled fears of higher prices by
> showing that producer prices rose only 0.l percent last month when the
> biggest increase in oil prices since the 1990 Persian Gulf crisis was
> excluded. Retail sales were restrained by a drop in auto and department
> store business and would have actually fallen one-tenth of a percent if it
> were not for a 2.4 percent rise in gasoline sales. ... (Bloomberg News
> report in New York Times, page C2).
> __The spring shopping season wasn't very rosy for retailers. ... Sluggish
> sales in March and April -- the 2 worst months for merchants since a drop
> in sales last July -- follow 2 months of exceptionally strong growth. ...
> Separately, the Labor Department issued some rare bad news on the
> inflation front, reporting that the producer price index -- fueled by a 29
> percent jump in gasoline prices -- rose 0.5 percent in April, the highest
> increase since December. ... Economists have played down the impact of
> higher oil prices on inflation overall, noting there is little evidence
> of price pressure in other parts of the economy. ... (Alejandro
> Bodipo-Memba in Wall Street Journal, page A2).
>
> The number of seasonally adjusted new claims filed with state agencies for
> unemployment insurance benefits was 303,000 in the week ended May 8,
> unchanged from the previous week, the Employment and Training
> Administration announces. ... (Daily Labor Report, page D-12; Wall Street
> Journal, page A2).
>
> The Labor Department is revising income levels used to define the term
> "economically disadvantaged" for purposes of qualifying for the Work
> Opportunity Tax Credit and certain job training programs. The "lower
> living standard income level" figures are scheduled for publication in the
> May 14 Federal Register. ... According to the department notice, the most
> recent lower living family budget was issued by BLS in 1981. BLS has no
> plans to revise the lower living family budget again, the notice says.
> However, DOL says it last updated the LLSIL in May 1998 to reflect cost of
> living adjustments. ... (Daily Labor Report, page A-2).
>
> Business economists see 1999 shaping up as another strong year for the
> economy, with growth of 3.8 percent, considerably more robust than they
> were predicting just 2 months ago, the National Association of Business
> Economists says. ... Inflation, as measured by the CPI, is expected to
> rise 2.0 percent this year, compared with 1.6 percent last year, and to
> accelerate to 2.4 percent in the year 2000. The unemployment rate is
> forecast to decline to an average of 4.3 percent for this year, down from
> 4.5 percent in 1998, but edge back up to 4.5 percent in 2000. ... (Daily
> Labor Report, page A-7).
>
> President Clinton announces his plan to designate Edward B. Montgomery,
> senior adviser to Labor Secretary Herman, as acting deputy secretary.
> Kathryn "Kitty" O'Leary Higgins held the post for nearly 2 years. ...
> (Daily Labor Report, page A-12).
>
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