[PEN-L:6182] BLS Daily Report

[Richardson_D <Richardson_D@xxxxxxx>]

> BLS DAILY REPORT, THURSDAY, APRIL 29, 1999:
>
> Today's News Release:  "Employment Cost Index--March 1999" indicates that
> the Employment Cost Index (not seasonally adjusted) for March 1999 was
> 140.4 (June 1989=100), an increase of 3.0 percent from March 1998.  The
> Employment Cost Index (ECI) measures changes in compensation costs, which
> include wages, salaries, and employer costs for employee benefits.
>
> U.S. employers laid off 211.796 workers in 2,209 mass layoff actions in
> January, BLS reports.  The total number of layoff events and the number of
> initial claimants for unemployment insurance were lower in January 1999
> than in January 1998 (Daily Labor Report, page D-4).
>
> A surge of demand for transportation equipment pushed up new orders for
> manufactured durable goods for a 2-percent March gain, the Commerce
> Department reports.  Seasonally adjusted data compiled by the department's
> Census Bureau show that new orders for these goods rose $3.8 billion to
> $197.7 billion.  An economist with Donaldson, Lufkin and Jenrette said the
> increase indicates "weakness in the manufacturing sector is bottoming and
> plant and equipment spending will likely pick up in the second quarter"
> (Daily Labor Report, page 1; The Washington Post, page E8).
> __Orders for big-ticket goods made in the United States rose in March for
> the fourth time in 5 months, a sign that the rebound in manufacturing is
> real, Government figures showed today.  Orders for products like cars,
> washing machines, and computers rose a stronger than reported 2 percent
> last month, Commerce Department figures show.  Even counting a 3.9 percent
> decline in February first-quarter orders rose at the strongest quarterly
> pace in 4 years (Bloomberg News, in The New York Times, page C10).
> __Manufacturing continued to make strides toward recovery, as new orders
> for durable goods rose by 2 percent in March (The Wall Street Journal,
> page A2; The Journal's page 1 graph is of durable goods, 1997 to the
> present).
>
> Crude oil prices spiked more than 3 percent to a 16-month high Wednesday,
> on shrinking supplies and signs that major oil producers are keeping
> promises to cut output. Traders say prices will continued to rise (USA
> Today, page B1).
>
> A study by the Center on Hunger and Poverty at Tufts University estimates
> that by 2010, the percentage of children in poverty will have grown at a
> faster rate in the suburbs than in the inner-city and rural areas, the
> traditional strongholds of poverty.  Both affluent and older working-class
> suburbs are seeing a rise in the number of people living at or barely
> above the federal poverty line of $16,450 for a family of four, $8,050 for
> one person.  the Census Bureau reported a slight dip in the poverty rate
> in 1997 in rural areas, central cities and suburbs.  But the suburban
> poverty rate still is higher than in 1990, 9 vs. 8.2 percent.  And urban
> experts expect the 2000 Census to reveal a big jump in poverty in suburban
> communities.  The reasons for the growing problem vary:  Welfare reform
> has cut government benefits for millions.  Cutbacks in housing subsidies
> are depleting the supply of affordable housing.  And skyrocketing housing
> prices mean rents and mortgages are eating up so much of a person's
> paycheck that it's a struggle to pay for food, clothing, and childcare.
> Many who work for minimum wage are relying on food pantries, free school
> lunches, and soup kitchens to feed their families.  An accompanying table
> shows the percent of children living in poverty in 1995, projections
> through 2010 and the rate of increase from 1995 to 2010 (USA Today, April
> 28, page 1).
>
> The oracles of the economy have seen the future of their profession and
> the outlook is hardly bright.  In a time of general prosperity,
> traditional economists are joining their own statistics as newly
> unemployed, displaced by employers' growing dissatisfaction with general
> economic forecasting and by consolidation among banks and securities
> firms.  the National Association of Business Economics reports that the
> median salary of "economics professionals" increased to $80,000 last year,
> up 9.5 percent from the group's prior biannual survey in 1996, and the
> biggest 2-year percentage gain since 1986.  The NABE says the major
> employers of economists are changing.  In 1978, manufacturing firms were
> home to more than one in four economists, while consulting firms hired
> just 8 percent.  Today, consulting firms hire 19 percent of economists,
> while manufacturing has just 7 percent.  Among consulting firms,
> accounting firms are currently the biggest recruiters, said the NABE (The
> Wall Street Journal, page A2).
>
> If technology is the key to success in today's competitive world, the U.S.
> appears to be extending its lead.  According to the European Information
> Technology Observatory's latest annual assessment, America boosted its
> information technology outlays from 4.08 of gross domestic product in 1996
> to 4.53 percent in 1997.  Meanwhile, Japan weighed in with just 2.61
> percent of its GDP, and Western Europe with only 2.34 percent.  Among the
> major European nations, only Britain invested more than 3 percent of its
> GDP in information technology.  The research group's tally of business PCs
> per 100 white collar workers tells a similar story.  It pegs the 1997 U.S.
> level at 105 -- more than one computer per office worker.  That's nearly
> twice the average level of 55 PCs for every 100 white collar workers in
> Western Europe and more than 4 times Japan's count of only 24 (Business
> Week,  May 3, page 27).
>
> It's a new world out there, and the old economic models don't seem to work
> anymore.  Nowhere is the change more apparent than at the Federal Reserve.
> After years of debate, Fed Chairman Alan Greenspan has convinced his
> fellow governors that fundamental changes in the economy -- especially the
> shift toward low inflation -- require change in monetary policy.  Gone
> will be the old secretive Fed, which held that the economy is inherently
> unstable and requires preemptive action to avoid trouble (especially
> inflation).  In its stead is a new, more transparent central bank that
> works by telegraphing its concerns and intentions to the markets.  By
> simply making known its bias toward easing or tightening, the Fed will
> rely on stock and bond markets to do their own economic fine-tuning.  But
> when the financial system is really threatened, as it was last fall when
> Russia defaulted, the Fed will still come in with direct decisive action
> (Editorial in Business Week, May 3, page 206}  An article in the same
> issue beginning on page 46 uses charts that show "why the old rules don't
> explain it".  While unemployment is low...and money growth is
> strong...inflation is still falling...and wage growth is coming down, are
> illustrated by 4 different graphs, using data 1993 to the present,
> attributed to BLS and the Fed.  The same article says that there is "a
> growing consensus that long-term productivity is running well above the 1
> percent trend of the 1970s and 1980s means the Fed can live with stronger
> growth without fearing resurgent inflation."  In addition "economic events
> abroad, such as the financial crisis of the past 2 years are forcing the
> Fed to take more of a global view in setting interest-rate policy for the
> U.S."
>

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