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BLS DAILY REPORT, TUESDAY AND WEDNESDAY, JANUARY 20-21, 1998
The number of mass layoff actions by the U.S. firms totaled 978 in the
third quarter of 1997, affecting about 183,000 workers, BLS reports.
Seasonal work was most often cited as the reason for the layoffs
.....(Daily Labor Report, Jan. 20, page D-6).
The experimental geometric mean version of the CPI kept to pattern in
its divergence from the CPI-U, rising 1.5 percent in 1997, according to
data from BLS. The official CPI-U rose 1.7 percent in the same period
.....(Daily Labor Report, Jan. 21, page A-11).=20
Output of U.S. factories, mines, and utilities advanced a solid 0.5
percent in December, with broad-based gains posted in nearly all
industries except the automotive sector, the Federal Reserve reports
.....(Daily Labor Report, Jan. 20, page D-1; Wall Street Journal, Jan.
19, page A2)_____Production at U.S. factories, mines, and utilities =
rose
5 percent last year over 1996, thanks to strong demand for goods =
ranging
from computers to trucks ....The yearly increase was the best since a
5.4 percent increase in 1994 (Washington Post, Jan. 17, page B1).
Employers held down health care costs last year by switching to cheaper
managed care plans, according to a study of 4,000 employers by William
M. Mercer Inc. of New York. Most companies, however, expect higher
bills in 1998. The cost of health benefits at public and private
employers with more than 10 workers averaged $3,924 per employee in =
1997
(Washington Post, Jan. 20, page E1)_____An unexpectedly strong surge of
workers into managed care plans last year helped hold the increase in
overall medical costs for active and retired employees to just 0.2
percent, according to the survey ....(Wall Street Journal, Jan. 20, =
page
B1)_____The annual study of 3,900 employers, the largest of its kind,
found that 85 percent of workers at firms with 10 or more employees are
now enrolled in managed health plans, up from 77 percent in 1996 and 52
percent in 1993 ....USA Today, Jan. 20, page 3A). =20
USA Today's "Economic Indicators" table (Jan. 21, page 3B) predicts =
that
the Employment Cost Index for the fourth quarter will increase 0.9
percent, compared with an increase of 0.8 percent in the previous
quarter.
Immigration may be reducing the wages of the working poor by as much as
12 percent, with minorities most likely to be affected, according to a
report released by the Center for Immigration Studies, a non-profit,
non-partisan research organization in Washington, D.C. The study found
that immigration may be reducing the wages of about 25 million workers
in low-skill occupations as much as $1,915 a year, while exerting =
little
or no effect on the salaries of workers in high-skilled jobs. The wage
depression caused by immigration occurs around the country and is not
confined to certain cities or states traditionally identified as
high-immigration areas, and it affects weekly and hourly wages, the
report said. Taking the entire workforce into consideration,
immigration appears to reduce the wages of the average worker by about =
5
percent ....But appearing at a press briefing held by CIS to release =
the
report, Economic Policy Institute economist Jared Bernstein said wages
would be kept low even in the absence of immigration and that the
immigrant labor pool plays a much smaller role in what is paid these
workers than the study claims ....The study was based on 1991 data
extrapolated from the Current Population Survey ....(Daily Labor =
Report,
Jan. 21, page A-2).
Temporary staffing companies are expected to punch in smaller profit =
and
revenue gains for the fourth quarter, due to a slowing economy and a
tightening labor supply. With unemployment levels at 24-year lows,
temporary workers have demanded higher wages - which some companies =
have
been unwilling to pay, fearing they wouldn't be able to pass the higher
costs to their own customers. A tight labor market makes finding
qualified workers difficult, but it can also benefit staffing =
companies,
an analyst said. "For staffing companies, labor is the product and if
this product is scarce, the law of supply and demand holds," she said.
"Staffing companies can raise both pay rates and bill rates for
hard-to-find skills and the spread between the two widens, resulting in
better margins" ....(Wall Street Journal, Jan. 19, page A9A). =20
The talk of deflation can be easily deflated, says "The Outlook" column
in the Wall Street Journal (Jan. 19, page A1) ....Many economists doing
manipulations for their companies find the chance of true deflation =
very
low ....Yet the issue of deflation isn't fading away ....Despite all =
the
talk, the definition of deflation remains murky. Amid growing
overcapacity and rising imports from Asia, many goods prices are
falling. But that isn't deflation, because overall prices are still
rising, especially for most services ....Services - few of which face
global competition - make up nearly 60 percent of the CPI and are still
climbing ....Another type of deflation is asset deflation. To some,
this is more important than a small drop in, say, auto prices.
Especially worrisome is the prospect of rapid declines in prices of
stocks and real estate ....Asset deflation has potentially ruinous
effects partly because of the psychological impact on consumers
.....Asset deflation would also harm the banks; securities and real
estate are important sources of collateral in most banking systems
.....Although no one knows where U.S. stock prices are heading, the
chance of an imminent implosion is remote in the other big category of
U.S. assets, real estate ....Few U.S. markets are overbuilt today ....=20
DUE OUT TOMORROW: Usual Weekly Earnings of Wage and Salary Workers:
Fourth Quarter 1997
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