> BLS DAILY REPORT, MONDAY, APRIL 7, 1997 > > RELEASED TODAY: "News Advisory -- BLS to Issue Experimental CPI > Indexes on April 10" points out that BLS will begin regular > publication of an experimental CPI that uses a geometric mean instead > of an arithmetic mean formula to calculate price changers at the basic > level of detail. These experimental data have been produced as part > of the BLS research effort to examine ways to make the CPI a more > accurate measure of price change. A briefing will be held on > Thursday, April 10, to assist reporters and other users in > understanding the new experimental index, called the CPI-U-XG. The > data being released on April 10 will show monthly price changes from > December of 1990 through February of 1997 in the all-items CPI-U-XG, > the seven broad components of food, housing, apparel, transportation, > medical care, entertainment, and other goods and services, and the > special indexes for food, energy, and all items less food and energy. > BLS will make printed materials available at 9:00 a.m. EDT on > Thursday, April 10. John S. Greenlees, Assistant Commissioner for > Consumer Prices and Price Indexes, and staff will make a brief > presentation at 9:30, followed by a question-and-answer period. All > materials and information will be embargoed until 11:00 a.m. EDT .... > > __Nonfarm payroll employment increased in March by a moderate 175,000 > seasonally adjusted, while unemployment dipped to 5.2 percent. At the > same time, the highest year-over-year increase in average hourly > earnings since June 1990 is recorded. Also, the March employment > report shows the largest proportion of the U.S. population employed > since BLS began keeping track in 1948. The employment-population > ratio rose to 63.8 percent ...."The pace of earnings growth has > continued to drift upward for several years now," said BLS > Commissioner Abraham at a press briefing ....(Daily Labor Report, > pages D-1, E-1). > __The strong U.S. economy kept churning out jobs and lifting wages > last month, pushing the nation's unemployment rate down to 5.2 > percent. While workers obviously are benefiting from all the added > jobs and higher wages, the report only heightened concerns among some > investors, analysts, and government policymakers that the pace of > economic growth may be spurring inflation ....Abraham told reporters > that the length of the average factory workweek rose two-tenths of an > hour last month, to a "quite high" 42.1 hours. Overtime hours > increased a similar amount, to 4.9 hours, the "highest level since we > began measuring it in 1956," she said ....(John M. Berry and Sharon > Webb, Washington Post, April 5, page A1).....A sidebar article by > Steven Pearlstein says that for three years they've been calling it > the Goldilocks economy -- not too hot, not too cold, just right. But > now there are almost daily signs that the economy has begun to > overheat, bringing with it a real danger of inflation, falling stock > prices, higher interest rates, and -- eventually -- a slowdown in job > and income growth. The latest evidence was delivered by the Labor > Department, which reported that the unemployment rate had declined > despite a big jump in the number of Americans joining -- or rejoining > -- the labor market .... > __The unemployment rate edged down to 5.2 percent last month -- > matching its lower level in eight years -- as the reinvigorated > economy continued to produce a bountiful labor market for legions of > Americans. While the government reported that employers added a > slightly less-than-expected 175,000 workers to their payrolls in > March, every other economic indicator pointed to strong growth that > may well prompt the Fed to raise interest rates again ....(Robert D. > Hershey, Jr., New York Times, April 5, page A1). > __More and more Americans are willing to work, and that's one > explanation of why the economy has been able to grow so much with > barely a hint of inflation ....The growth in the labor force reverses > a perplexing trend from earlier in the current expansion, when > millions of potential workers remained on the sidelines despite the > economy's growth. Now six years old with no signs of slowing, the > expansion finally appears to be offering incentives to once-excluded > segments of the population ....The March report provided some signs > that the strong labor market may now be fueling inflation, but the > signals weren't that alarming to economists. The average hourly wage > rose by 0.4 percent in March, the same pace of increase as in > February. Compared with a year earlier, wages in March were up 4 > percent, the largest jump since 1990. But many economists believe > this report doesn't provide as accurate a picture of employment costs > as other governmental statistics, which do not show such clear-cut > increases. In another sign of labor market tightness, factory > overtime rose by l2 minutes to 4.9 hours per week, the highest level > since the department started tracking the figure 41 years ago > ....(Wall Street Journal, page A2). > > The Wall Street Journal's consensus forecast for the Producer Prices > Index is for "no change" in the March figure (page A4). > > Federal Reserve Board Vice Chairman Alice Rivlin said it would be a > "mistake" to make price stability the sole goal of the nation's > central bank, asserting that maximizing growth and employment are > equally important policy goals. But Rivlin, in remarks delivered to > the Eastern Economic Association, also defended the Fed's recent > quarter-point increase in short-term interest rates as a > forward-looking move made necessary by an economy that may be on the > verge of overheating. She hailed the benefits of the economy's > current tight labor markets, stating that this is exactly the type of > climate needed to make welfare reform a success. Rivlin also urged > economists to launch "a full court press" for better and more useful > economic data, not to be content with "the same old statistics that we > continue to collect" ....Giving the Fed a zero-inflation target as its > policy goal, in particular, would be a mistake because current > inflation data are awash in measurement problems, so it would be > difficult to determine if and when that target is achieved, and > because the costs of achieving zero inflation could be substantial, > she said ....(Daily Labor Report, page A-14). > > >
