[PEN-L:11758] FW: BLS Daily Report

[Richardson_D <Richardson_D@xxxxxxx>]

BLS DAILY REPORT, WEDNESDAY, AUGUST 13, 1997

RELEASED TODAY:  The Producer Price Index for Finished Goods decreased
0.1 percent in July, seasonally adjusted.  This followed drops of 0.1
percent in June and 0.3 percent in May and is the seventh consecutive
monthly decline in the index.  Prices received by domestic producers of
intermediate goods decreased in July after showing no change in the
previous month.  The Crude Goods Price Index fell 0.1 percent after
declining 3.3 percent in June ....

__Nonfarm productivity rose 0.6 percent during the second quarter of
1997, compared with a 1.4 percent advance in the first three months of
the year, BLS reports ....(Daily Labor Report, page D-1).
__Fears of incipient inflation were not helped by a report that the
nation's productivity grew at a seasonally adjusted annual rate of just
0.6 percent in the second quarter.  That was a slower gain than in the
first three months of this year.  Productivity is closely watched by the
financial markets.  High productivity allows employers to raise wages
without also raising prices, which tends to keep a lid on inflation
....(Washington Post, page D9).
__Louis Uchitelle (New York Times, page D1) reports that the
productivity growth rate of American workers -- measuring how much more
they produce in an hour on the job -- rose at an annual rate of only 0.6
percent in the second quarter.  The announcement was greeted with hoots
of criticism from a growing number of economists and business people who
insist that the official data greatly understate a flourishing
efficiency in the workplace ....The new were doubly disappointing for
those who hold that the boom in corporate profits and stock prices, and
the low inflation rate, result chiefly from rising productivity ....Not
only was the second-quarter number weak, but BLS revised downward the
bullish first-quarter number ....Most of the weak productivity growth
this year came from downward revisions in output without similar
downward revisions to hours worked ....BLS is using the best available
data, said Edwin Dean, chief of the bureau's productivity division.
"Our methodology for computing labor productivity is widely accepted"
....
__If the American economy has truly entered a "new era," as many
analysts and executives now argue, the government numbers aren't showing
it, says the Wall Street Journal (page A2) ...."The figures that we're
looking at do not show that we've reached a sudden breakthrough in
productivity growth in the last few years," said Edwin Dean, chief
productivity specialist for BLS.  A growing number of economists believe
that the statistics are badly flawed ....Although the government doesn't
calculate statistics for the service sector, the fact that manufacturing
is doing so well while business overall isn't implies that productivity
in services was either flat or even negative for the second quarter.
Many analysts consider that conclusion questionable ...."We're doing the
best job of measuring productivity that anybody knows how to do,"
responded Mr. Dean ....

Although U.S. workers are largely content with their jobs, many could be
easily lured away by only slight increases in pay, Aon Consulting's
Loyalty Institute reports ....(Daily Labor Report, page A-7).

For the first time in a decade, home prices are rising nearly
everywhere, with 80 percent of the nation's metropolitan areas showing a
rise in home prices that exceeds the inflation rate.  The strength in
housing, particularly at the high end of the market, is even causing
some bidding wars reminiscent of the 1980s ....(New York Times, page
A1).

For grease monkeys, high tech is changing the mechanics of car repair.
Fixing cars can still provide a good living for those prepared to
compute ....(Wall Street Journal, page A

DUE OUT TOMORROW:
     Consumer Price Index -- July 1997
     Real Earnings: July 1997