[PEN-L:4682] FW: BLS Daily Report

[Richardson_D <RichardD@xxxxxxxxxxxxxxx>]

DAILY REPORT, THURSDAY, JUNE 13, 1996

_____With energy prices rising at a more moderate pace than in the prior two

months, consumer prices climbed 0.3 percent seasonally adjusted in May,
according to figures from BLS (Daily Labor Report, pages 1,D-1).  The
annualized rate of increase in the CPI was 4.1 percent for the first five
months of this year, accelerating from the 2.5 percent rise for all of 1996
....Gasoline prices climbed 4.7 percent in May, an increase that would have
been 0.9 percentage point higher were it not for a quality adjustment BLS
made to account for mandated changes to gasoline in California ....BLS
economist Patrick Jackman explained that, while such quality adjustments are

controversial, even within the bureau, they have been made in CPI components

since the early 1970s whenever a price change can be attributed to a
mandated safety or environment change ....
_____The Washington Post (page D8) reports that consumer prices rose 0.3
percent last month, down a notch from the increases in the two previous
months as the wave of energy price hikes slowed down ....The moderate rise
in prices was not enough to calm investors who are concerned that strong
economic growth will lead to higher inflation, to which the Federal Reserve
will respond by raising short-term interest rates ....Joseph E. Stiglitz,
chairman of the White House Council of Economic Advisers, said in an
interview, "There is no pressures in the economy that leads one to believe
there will be an increase in inflation" ....
_____The New York Times (page D3) says inflation remains well contained,
despite an increasingly robust economy and the lingering effects of pinched
oil supplies earlier in the year ....
_____The Wall Street Journal (page A2) reports that economists said the most

closely watched portion of the CPI -- the core rate -- showed that inflation

remains under control ....
_____USA Today (page 1B) says:  "To heck with the evidence.   Bond traders
are increasingly worried that stronger-than-expected economic growth will
trigger an inflation spike. ...What alarmed bond traders Wednesday:  A
government report on what consumer prices did last month."

Inflation-adjusted weekly pay of U.S. workers edged down 0.1 percent in May,

the fifth decline of real earnings in the last six months, BLS reported
....(Daily Labor Report, page D-10).