BLS DAILY REPORT, WEDNESDAY, FEBRUARY 18, 1998
RELEASED TODAY: The Producer Price Index for Finished Goods declined
0.7 percent in January, seasonally adjusted. This decline was led by a
sharp drop for finished energy prices and followed decreases of 0.2
percent in both December and November. The index for finished goods
other than foods and energy declined 0.1 percent for the third
consecutive month. Prices received by producers of intermediate goods
fell 0.6 percent in January, after decreasing 0.3 percent in the prior
month. The crude goods index declined 4.5 percent, following a decrease
of 5.2 percent in December ….
Spending on computers accounts for a fraction of the economy, yet
plunging computer prices have helped trim inflation by more than a
third. Price drops on personal computers and related technology have
been dramatic this decade, averaging 15 percent a year. Prices fell a
stunning 22 percent in 1997. Spending on those products by consumers
and businesses accounted for less than 6 percent of economic activity,
but helped push inflation a percentage point or more lower than it would
have been, economists say ….Computers have an exaggerated effect on the
economy because computer components are found in so many products.
Examples: automobiles, cameras, TVs, and price scanners at stores.
Those computer components have been subject to the same price declines
as PCs ….(USA Today, page B1).
Industrial production held steady in January, with a sharp drop in
utility output offsetting gains in mining and manufacturing, the Federal
Reserve reports. Seasonally adjusted data compiled by the Fed showed
that a slowdown in the production of automotive goods also helped check
factory output during the month ….(Daily Labor Report, page
D-1)_____Industrial production unexpectedly stalled in January as
utility output fell 4 percent ….(New York Times, page D2)_____Industrial
production failed to rise in January for the first time since late 1996,
a reflection of unseasonably warm weather and continuing effects of the
Asian financial crisis ….(Wall Street Journal, page A2; Washington Post,
page C14).
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