[PEN-L:571] BLS Daily Report

[Richardson_D <Richardson_D@xxxxxxx>]

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BLS DAILY REPORT, FRIDAY, OCTOBER 16, 1998

RELEASED TODAY:
   CPI -- On a seasonally adjusted basis, the CPI-U was unchanged in
September, following increases of 0.2 percent in each of the preceding 2
months.  In September, the food index was unchanged. ... The index for
petroleum-based energy decreased 2.1 percent, and the index for energy
services fell 0.8 percent.  Excluding food and energy, the CPI-U
increased 0.2 percent in September, the same as in July and August. ...
  REAL EARNINGS -- Real average weekly earnings decreased by 0.6 percent
from August to September after seasonal adjustment.  The decline stemmed
from a 0.6 percent decrease in average weekly hours and a 0.1 percent
rise in the CPI-W.  This was partially offset by a 0.1 percent increase
in average hourly earnings. ... Between September of 1997 and 1998, real
average weekly earnings increased by 1.1 percent. ...

__Smaller-than-anticipated automobile and light truck discounts in
September pushed up seasonally adjusted producer prices for finished
goods 0.3 percent in the month, BLS says.  Government and private
analysts say unusual pricing patterns in the automobile industry rather
than an actual cost increase in cars and light trucks caused the largest
monthly producer price increase in the past year.  Essentially, car
manufacturers offered incentive discounts at different times in 1998
than the pattern established over the last several years. ...
Private-sector economists say the September increase does not indicate
that commodity prices are breaking out of their well-behaved pattern.
The PPI for finished goods would have risen only 0.1 percent in
September if auto and light truck prices were removed from calculations,
said BLS economist Joseph Kowal. ... (Daniel J. Roy in Daily Labor
Report, page D-1; John Simons in Wall Street Journal, page A2).
__Analysts dismissed the 0.3 percent increase as a fluke and said
faltering world demand will restrain inflation pressures.  The increase
in the index was pushed up by big increases for cars, vegetables, and
home heating oil (Washington Post, page F1; Bloomberg News article in
New York Times, page C8).

Labor statisticians from around the world meeting in Geneva agree on new
global standards for reporting income from employment and on-the-job
injuries.  The statisticians had more difficulty, however, in dealing
with a new proposal for measuring underemployment, with officials from
the United States and other industrialized regions failing to come to an
agreement with developing country representatives on how to define the
term.  The meeting, hosted every 5 years by the ILO, was the 16th such
gathering of statisticians.  Ensuring comparability between reporting
methods on labor statistics from different countries has been a task of
the ILO since the 1920s. ... (Daily Labor Report, page A-1).

New claims filed with state agencies for unemployment insurance benefits
increased by 2,000 to a seasonally adjusted total of 303,000 for the
week ended Oct. 10, the Employment and Training Administration reports.
.... (Daily Labor Report, page D-10; New York Times, page C8).

Business inventories crept up 0.3 percent in August, Commerce Department
data show. ... (Daily Labor Report, page A-2).

The hot U.S. job market?  It's getting cooler by the minute, says The
Wall Street Journal (page A2).  After months of low unemployment and
intense competition for workers, U.S. companies in a variety of
industries have started a round of year-end job cuts.  Nearly a dozen
big firms have announced staff reductions in the past week in an attempt
to bolster profits amid weakening sales and pricing. ... Companies
eliminating jobs are clinging to a common truth: While pricing power is
withering because of the world-wide economic slowdown, wages in the U.S.
have increased, inflating companies' overall cost structure. ...

Luxury businesses are always the first to feel a downturn, and are they
ever feeling it now, says The Wall Street Journal (page W1).  The
Journal article on problems in spending for products or services not
actually necessary is illustrated with a Dow Jones Luxury Spending Index
that shows such categories as luxury yacht charters and a 4-ounce jar of
caviar and the change in price, actual and in percent, over the past
year.  In each case, the percent change in price is down, with the
percent change in the price of a 4-ounce jar of caviar down 50 percent.



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