BLS Daily Report

[Richardson_D <Richardson_D@xxxxxxx>]

> BUREAU OF LABOR STATISTICS, DAILY REPORT, MONDAY, SEPTEMBER 17, 2001:
>
> After falling for two consecutive months, the producer price index for
> finished goods increased 0.4 percent in August, according to the Bureau of
> Labor Statistics.   The index stood at 140.9 in August, after falling 0.9
> percent in July and 0.4 percent in June.  According to the report,
> producer prices in August were 2.1 percent higher than a year before.
> Prior to seasonal adjustment, the producer price index for consumer goods
> increased 0.3 percent in August to stand at 141.1.  "Obviously, the
> economic landscape has been altered since the producer price data was
> collected last month," said the vice president of Strategic Direction at
> the National Association of Wholesaler-Distributors.  "That said, some
> recent economic data are nonetheless encouraging.  Both core producer
> prices and retail sales moved in the right direction in the most recent
> period, with prices declining and sales increasing.  This should impart
> some confidence to consumers and businesses, which is very much needed at
> the moment."  According to the latest BLS figures, the so-called core rate
> of wholesale inflation -- the all-items finished goods PPI minus food and
> energy -- decreased 0.1 percent in August, after a 0.2 percent increase
> the previous month (Daily Labor Report, page D-1).
>
> Industrial output fell 0.8 percent in August, marking its 11th consecutive
> month of contracting activity, Federal Reserve reported Sept. 14. The
> declining activity was widespread during August, as nearly every major
> industrial sector said output fell.  Only the utilities sector posted a
> gain in August, as output grew 1.6 percent after falling 0.7 percent
> during July.  "We knew that the manufacturing sector was the weak link in
> the economy, but we thought we had seen some signs of stability.  However
> this report makes it clear that conditions are still disastrous," said the
> president of Naroff Economic Advisors in Holland, Pa. (Daily Labor Report,
> page D-3; The Washington Post, September 15, page D2).
>
> Retail sales rose 0.3 percent in August, posting their strongest gain
> since April, the Commerce Department reports. But economists said that the
> data do not mean much in light of the terrorists attacks against the
> United States, which change the outlook for consumer spending in the
> months ahead (Daily Labor Report, page D-6).
>
> Industrial production fell for the 11th consecutive month in August, a 0.8
> percent drop that dashed hopes the nation's beleaguered manufacturing
> sector was on the verge of a rebound.  In other government economic
> reports, retail sales rose a moderate 0.3 percent despite the fact that
> auto sales dropped in August.  And wholesale prices climbed 0.4 percent as
> the cost of gasoline and other energy products posted sharp increases.
> The 0.4 percent rise in the labor Department's Producer Price Index, which
> measures inflation pressures before they reach consumers, followed a large
> 0.9 percent drop in July.  While the overall price increase was worse than
> analysts had been expecting, the core rate -- which excludes the volatile
> energy and food sectors = fell by 0.1 percent last month.  That was the
> first drop since February, reflecting a record decline in computer prices
> (Associated Press, The New York Times, September 15, page C2).
>
> Businesses showed progress whittling inventories of unsold goods in July,
> marking the sixth month in a row that inventories have declined.  Sales
> posted a solid increase.  The Commerce Department reports that supplies on
> shelves and backlots fell a seasonally adjusted 0.4 percent in July,
> following an even bigger 0.6 percent drop the month before.  At the same
> time, businesses' sales advanced 0.4 percent, after having plunged 1.5
> percent in June.  Federal Reserve Chairman Alan Greenspan has attributed
> much of the economy's weakness to an effort by businesses to cut back
> quickly on production to bring inventories back in line with sales.  The
> economy slowdown, which started in the second half of last year, has
> curbed American's appetite for goods, causing an inventory pileup.  To
> reduce inventories, companies have laid off workers, reduced shifts, and
> deeply discounted merchandise (Jeannine Aversa, Associated Press,
> http://www.nandotimes.com/business/story/80322p-1121598c.html).
>
> Will the deadliest terrorist attack in U.S. history turn into the world's
> most costly incident of economic terrorism?  The answer may depend on what
> investors across America do today when the stock market reopens.  The
> market's 4-day shutdown is the longest since Franklin Delano Roosevelt
> declared a "bank holiday" to protect the nation's financial system during
> the Great Depression.  Now, as then, the government's goal is the same:
> to stop a run, to start a cooling-off period, so investors do not panic
> and pull out their money, bringing down the system.  That threat prompted
> an unprecedented Washington, D.C.-Wall Street alliance last week that came
> up with a plan the Securities and Exchange Commission said will
> "facilitate" the reopening of the market.  What the SEC is doing is
> suspending rules designed to prevent corporations, brokerage firms and
> mutual funds from propping up stock prices
> (http://www.washingtonpost.com/wp-dyn/articles/A40050-2001Sep16.html).
>
>
> DUE OUT TOMORROW:  Consumer Price Index -- August 2001;  Real Earnings:
> August 2001
>

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