> BLS DAILY REPORT, FRIDAY, MAY 28, 1999:
>
> The number of seasonally adjusted unemployment insurance claims filed with
> state agencies in the week ended May 22 stood at 300,000, and the Labor
> Department reported no change in the number of new applications for
> unemployment insurance that week. The seasonally adjusted insured
> unemployment rate was 1.8 percent for the week ended May 15, unchanged
> from the prior week's figure. The rate refers to the percentage of people
> covered by the unemployment insurance law who are receiving benefits
> (Daily Labor Report, page D-11).
>
> Looking at a broad array of studies, the Government Accounting Office
> reports that between 61 and 87 percent of adults who have left welfare
> rolls were employed, a larger proportion than indicated in earlier
> studies. While the employment rate was encouraging, the agency found
> little information on the total family income of households that included
> former welfare recipients (Day Labor Report, page A-11).
>
> The Conference Board says its help-wanted index slipped one point in
> April, suggesting a dip in job growth, but solid wage gains and strong
> consumer spending should continue to buoy both employment and the overall
> economy (Daily Labor Report, page A-4).
> __Help-wanted advertising slowed for a third straight month in April,
> according to the latest monthly survey by the Conference Board (The Wall
> Street Journal, page A2).
>
> Computer hackers continued a series of electronic attacks against some
> Internet sites of the Federal Government yesterday, defacing the Web-site
> of the Senate before it was taken down. The FBI's Web site also remained
> inaccessible late last night, a day after the agency said hackers tried
> unsuccessfully to compromise it. It was unclear when the FBI would make
> the site available, after "taking additional steps to further insulate
> it." An obscene message left on the Senate's Web site said the attack was
> prompted by what it said was the FBI's harassment of hacker groups,
> including the group that took credit for breaking into the White House
> site earlier this month. MSNBC reported that the attacks stemmed from the
> FBI's execution of a search warrant on the home of a prominent hacker in
> Houston (An Associated Press story carried by The Washington Post, page
> A20).
>
> The gross domestic product grew at an annual rate of 4.1 percent, down
> somewhat from the 4.5 percent rate reported last month and well below the
> 6 percent annual rate in the fourth quarter of 1998, the Commerce
> Department says in its report on the January through March period.
> Consumer spending and investment rose strongly (The New York Times, page
> C4; The Wall Street Journal, page A2).
>
> The good economic news sounds too good to be true. And it may be -- just
> a little, says Business Week, May 31, page 34. What many people seem to
> have ignored is that BLS has been working overtime since the mid-1990s to
> improve the accuracy of the CPI and remove an upward bias in its readings.
> Changes made in 1998 and 1999 -- reflecting an updated market basket of
> items, quality changes in personal computers, and consumption shifts in
> response to fluctuating prices -- have clipped half a percentage point
> more from inflation readings. The key point to remember, however, is that
> BLS doesn't revise its higher estimates of past inflation when it makes
> such improvements. So a significant chunk of the reported downturn in
> inflation since 1995 -- perhaps three-fourths of a percentage point --
> reflects changes in the behavior of statisticians rather than changes in
> the underlying pace of price hikes. The same is true of the economy's new
> higher growth path and vaunted productivity pickup. At any given level of
> nominal gross domestic product, a lower inflation estimate translates into
> higher real output, and since labor input doesn't change that implies
> higher labor productivity. Revisions in the CPI, particularly since 1997,
> says one economist, are responsible for "a good part of the recent jump in
> productivity". Since the Federal Government uses the CPI to index such
> big budget items as Social Security and military pensions, as well as
> income tax brackets, a downsized CPI has helped keep a lid on inflation
> adjustments to transfer payments and pushed people with rising incomes
> into higher tax brackets. This suggests that the old economy wasn't quite
> as lackluster as it seemed, and that the recent improvement has been
> exaggerated.
>
> After hitting a 10-year high last year, planned layoffs by major
> corporations are running 41 percent over 1998's pace, says Business Week,
> May 31, page 34. April was the 13th consecutive month in which the
> job-cut total exceeded the year-earlier level. Alan Greenspan, Fed
> Chairman, has offered an explanation for the seeming contradiction between
> low unemployment and high layoffs. He says that employers' increased
> tendency to shed employees has actually encouraged hiring. Employers in
> the past worried that hiring new workers was a relatively heavy
> commitment. But the knowledge that they now have the freedom to let them
> go if conditions warrant may have made them less reluctant to hire new
> employees.
>
> Inflation is back in the vocabulary for a number of reasons, says Business
> Week (May 31, page 39). Global recovery -- as markets in Asia and
> elsewhere strengthen, the deflationary forces unleashed by last year's
> economic crisis subside. Then a high surge from last year's lows helped
> boost the CPI, but the price of oil has fallen a bit since. And most
> companies still lack pricing power. But drugs, health care, and building
> supplies are up. Home buyers are seeing that sellers have plenty of
> power, too.
>
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