BLS DAILY REPORT, TUESDAY, MARCH 4, 1997 __The National Association of Purchasing Management reports that growth in the manufacturing sector was buoyed in February by gains in new orders and production, and prices paid for raw materials jumped for the third month in a row ....On the inflation front, prices paid by manufacturers continued to rise, and supplier delivery times slowed, a development that bears watching by the inflation-wary Federal Reserve, money market economists said. Manufacturing employment, on the other hand, declined for the third consecutive month, leading some economists to revise their expectations for February's employment report ....(Daily Labor Report, page A-5). __Activity among American manufacturers improved in February from a month earlier, as orders and production accelerated ....(New York Times, page B8). __The manufacturing sector is sending a few inflationary signals but they are still fuzzy and faint ....(Wall Street Journal, page A2). __Total personal income increased 0.3 percent in January, while consumer spending climbed 0.7 percent, the Commerce Department reports. The January increase in spending is the largest since a 0.9 percent gain in October ....Wages and salaries-- which account for about 57 percent of total income -- edged down 0.1 percent in January after increasing 0.1 percent in December. A January decline in average weekly hours more than offset advances in employment and average hourly earnings ....(Daily Labor Report, page D-1). __The Commerce Department said that January's increase in income was inflated by special factors, including cost-of-living increases for federal programs like Social Security and pay increases for civilian and military personnel. Without the special factors, personal income increased less than one-tenth of 1 percent ....(New York Times, page B8). Construction spending rose 0.4 percent in January, not quite reversing the previous month's decline, the Commerce Department reports. Gains came from industrial and office construction, along with construction of apartment buildings ....(Daily Labor Report, page A-5). President Clinton gave his aides the go-ahead to try to forge a deal with Congress to reduce cost-of-living adjustments for Social Security and other benefit programs, White House officials said. The officials said the administration had not decided on a specific proposal, but would start consulting with members of Congress from both parties, as well as with outside economists, to find a bipartisan way of dealing with the issue, which could determine the success of efforts to balance the budget ....The officials said the administration would float several ideas, including the creation of a commission to make nonbinding recommendations ....They said the emphasis would be on trying to create a panel that would have technical credibility on a subject that is complex even for economists. The administration would prefer a panel whose members do not already have strong views on the subject so that their work did not appear rigged to find budget savings at the expense of benefit recipients ....(The New York Times, page A16). An editorial in Saturday's New York Times, "A Rational Way to Reduce the Deficit," says: "To fix the problem, Congress need not tamper with the actual computation of the [CPI] index, which is produced by a professional, nonpartisan staff at the Bureau of Labor Statistics. Instead it could forthrightly acknowledge that the official measure is exaggerated, that a reliable measure is not yet available and that it will make a reasonable correction for the purposes of adjusting Federal spending and tax programs ...." Michael J. Boskin responds in the New York Times' letters-to-the-editor to an op-ed article (Feb. 27) by Joel Popkin.
