The first item, on unemployment and the size of the labor force, is very interesting. There is now a higher labor force participation rate than at any time since the series was begun in 1943! Now I do not have memories of 1943 (I hate to say it but it is the year I was born.) It is my impression, however, that in 1943-44 the totally disabled held paying jobs. As I remember it, 1944 was the year of Pete Gray(?), the one-armed major league outfielder. Seriously, the labor force participation rate is much more important as an indicator of the demand for labor than the UP rate. Now, with the fall in real wages and increased participation, it seems that we are on a backward-bending part of the labor supply curve. Does anyone have any information to add on this? Dave Richardson ---------- From: Hoyle_K Sent: Monday, February 10, 1997 6:02 PM To: DailyReport Subject: BLS Daily Report BLS DAILY REPORT, MONDAY, FEBRUARY 10, 1997 __Businesses in the nonfarm payroll sector expanded briskly in January, with a gain of 271,000 jobs, but seasonal factors exaggerated the increase, perhaps by as much as 50,000, according to BLS ....There is no doubt that the year began on a strong note for the labor market, but analysts say they are puzzled by the unusually large seasonal adjustments. January employment data are notoriously difficult to forecast and, often, just as hard to interpret, analysts agree. It is the month that is most affected by a variety of factors ranging from weather to post-holiday cutbacks. In fact, BLS says that under the agency's seasonal adjustment procedures, payrolls were expected to drop by 2.8 million in January ....The unemployment rate inched up to 5.4 percent ....Data for certain industries illustrates the wide gap between seasonally adjusted and unadjusted figures in January. Retailers' payrolls rose by 19,000 in January after seasonal adjustment. BLS economist Philip Rones said that the current seasonal adjustment factors expected retail firms to shed 1 million jobs in January, or more than one-third of the 2.8 million projected for all industries ....Confusion over seasonal factors came up in discussion with Joint Economic Committee members about an increase of 82,000 in the help supply services industry estimated for January. Commissioner Katharine Abraham said that seasonal factors could be exaggerating that estimate by between 20,000 and 40,000, which prompted some lawmakers to express concern about how to interpret the data. Abraham said that "it is always an issue in focusing on the numbers for any one month" ....Seasonal factors also skewed employment estimates from the household survey, but BLS economist Rones said the effects are harder to gauge because of the different nature of the other data series ....(Daily Labor Report, pages 1,D-1,E-5). __The continued demand for workers has been so strong across the country that a record share of the U.S. population over age 15 -- nearly two-thirds -- had a job last month. The search by employers for both skilled and unskilled workers has drawn so many people into the job market that, over the past year, the size of the labor force has increased twice as fast as the population itself ....This unanticipated surge in workers provided enough additional labor last year that the economy was able to grow much more rapidly than forecasters had expected without causing the unemployment rate to plunge ....Beyond this already rapid growth in the labor force, BLS revised its estimate of the work force upward by another nearly half a million workers last month, based on new population data from the Census Bureau regarding the number and age of recent immigrants to the U.S. Most of the added workers were of Hispanic origin ....(John M. Berry, Washington Post, Feb. 8, page H1). __A buoyant economy created more jobs last month than economists had expected, but growth in labor costs slowed, calming Wall Street's jitters about inflation ....The unemployment rate, however, edged up one-tenth of a point, as a large number of people entered the job market ....Still, both the proportion of the population with jobs and the proportion who either have jobs or are actively looking for them edged up to new heights, surpassing the peaks of late 1996. Officials said that the percentages were the highest since the two related statistical series were begun in 1943 ....(Robert D. Hershey Jr., New York Times, Feb. 8, page 35). __The economy continues to be a broken record of good news. The economic picture continues to be bright as payrolls grow and the labor force expands ....(Christina Duff, Wall Street Journal, page A2). __The nation's unemployment rate rose slightly. The report also showed a stronger-than-expected increase in payroll jobs. Average hourly wages for nonsupervisory workers rose only 1 cent last month after gaining 15 cents total for two previous months. Stock and bond prices rallied as news of minimal wage growth calmed inflation fears (USA Today, page 1B). Clinton seeks technical consensus on cost-of-living adjustment issue -- President Clinton is not restricting his consideration of the true measure of inflation and the question of accurately adjusting federal cost-of-living adjustments to the Labor Department's BLS, National Economic Council Chairman Gene Sperling said Feb. 7. "The president believes in the cost-of-living adjustment," Sperling told a group of reporters. "He believes it should be accurate. He believes it should be determined based on broad-based agreement among the top technical experts and done on a technical basis, and that it should not be done for budgetary or political reasons." In responding to questions, Sperling several times started to refer to "CPI," before stopping himself to use the term "cost-of-living adjustment" ...."We do not have a view [on a commission]," Sperling said. " ....If you write that we are taking it out of BLS, I will be upset because I have not said that" ....Sperling vaguely described the next step for the administration on the inflation question, saying the White House and Treasury are "studying different suggestions" and "studying different reports" .... A Washington Post article (Feb. 9, page H1) says that the next big frontier for the baby boom generation could be age discrimination complaints. The generation's peak is hitting 40, a key milestone for workplace discrimination suits ....About 60 million workers are now 40 or older, or about 45 percent of the total work force, according to Howard Fullerton, a demographic statistician with BLS. By 2004, all the baby boomers -- those Americans born from 1946 through 1964 -- will be covered by federal age discrimination laws .... President Clinton has announced a swap of top officials at the White House and the Labor Department. He announced that he intends to nominate Kathryn O'Leary "Kitty" Higgins as the deputy secretary of labor. If confirmed by the Senate, Higgins would return to the Labor Department as its second highest official after a two-year White House stint. The White House also announced that Maria Echaveste, head of the Labor Department's Wage and Hour Division, will take over as director of public liaison at the White House, a post previously held by labor secretary designate Alexis Herman. Herman now has the title of counselor to the president while she awaits Senate confirmation ....(Daily Labor Report, page A-4). The estimated number of immigrants living in the United States illegally has increased by about 1.1 million people in the last four years, to a total of 5 million people, the Immigration and Naturalization Service said ....(New York Times, Feb. 8, page 9). Included is a list of where these illegal immigrants are from and their estimated numbers and the states in which they now live. The Wall Street Journal's feature "Tracking the Economy" (page A4) points out that the Producer Price Index figures for January will be released Friday, and its Technical Data Consensus Forecast says that the data will show an increase of 0.2 percent, compared to an actual increase of 0.5 percent last month. The ongoing strike at the company that produces seats used by Ford Motor Co. in two of its vehicle lines has forced the automaker to curtail operations at three of its plants, idling some 6,8000 workers ....(Daily Labor Report, page A-9). DUE OUT TOMORROW: Productivity and Costs: Preliminary Fourth-Quarter Measures and Annual Averages, 1996
