> BLS DAILY REPORT, MONDAY, MAY 3, 1999:
>
> More than half (57 percent) of all youths work at some time while age 14,
> mostly in freelance jobs, according to a new survey by BLS. The findings
> represent the first round of the National Longitudinal Survey of Youth
> 1997, a nationally representative sample of 9,022 young men and women who
> were 12 to 16 years old on December 31, 1996. The survey provides
> information on employment experiences, schooling, family background, and
> social behavior (Daily Labor Report, page D-13).
>
> The U.S. economy grew at a 4.5 percent annual rate in the first quarter,
> as consumers spending boomed, the Commerce Department reports. Personal
> consumption surged 6.7 percent (Daily Labor Report, page D-3).
> __As American consumers continued their shopping spree, increasing their
> spending at the fastest pace in more than a decade, the U.S. economy grew
> at a stronger than expected 4.5 percent annual rate in the first 3 months
> of the year, the Commerce Department reported yesterday. Consumers spend
> more than they received in current after-tax income, snapping up new motor
> vehicles, furniture, clothing and a variety of services. That meant that
> households had to borrow or dip into savings to cover the difference,
> driving the personal savings rate to an all-time low of minus 0.5 percent.
> Consumers appear emboldened by a variety of factors, including plentiful
> jobs, rising wages, low interest rates, low inflation and rising household
> wealth because of the soaring stock market and solid real estate markets.
> Nonetheless, economists and financial analysts keep expecting consumer
> spending gains to drop back so that they are more in line with increases
> in current income (John M.Berry, in The Washington Post, May 1, page 1).
> __America's economic boom -- already the second longest on record -- shows
> no signs of flagging. Despite a declined in auto production and another
> sharp deterioration in the trade balance, the United States economy grew
> at a surprisingly robust rate during the first quarter of 1999 (Sylvia
> Nasar, in The New York Times, page 1).
> __Consumers were buying up everything in sight in the first quarter of
> 1999, keeping the U.S. economy roaring ahead despite a worsening trade
> deficit. Over the 4 quarters of 1998, the U.S. economy expanded by 4.3
> percent. The GDP, or the value of all goods and services produced in the
> U.S., shot up at a 4.5 percent annual rate in the first quarter of 1999,
> following a stunning surge of 6 percent in the fourth quarter or 1998 (The
> Wall Street Journal, page A2). Throughout April, investor enthusiasm over
> a recovering global economy and firming commodity prices sent the stocks
> of economically sensitive companies through the roof. Yet this positive
> sign could have its unpleasant flipside. Could a stronger economy and
> stronger commodity prices feed inflation pressure, drive up interest rates
> and undermine one of the most richly valued stock markets ever? (The Wall
> Street Journal, page C1).
>
> Although analysts have been predicting a moderation in consumer spending
> and overall economic growth for some time, U.S. households have continued
> to defy those forecasts, using net worth, low interest rats, and falling
> import prices to fuel their demand for goods and services. Yet there are
> some tangible signs, suggesting that consumers are starting to rein in
> their purchases, a notion supported by the upswing in April tax payments,
> higher long-term interest rates, and a decline in weekly saving.
> Generally, economists contacted by the Bureau of National Affairs, say
> consumer spending should slow to about half of its first-quarter pace in
> the April-June period, with outlays forecast to advance to about a 3
> percent annual rate rather than the lofty 6.7 percent pace charted at the
> start of 1999. With consumer expenditures accounting for two-thirds of
> total U.S. economic activity, that still would yield an overall growth
> rate of about 2.5 to 3.4 percent for the second quarter, analysts say
> (Daily Labor Report, page D-1).
>
> Real, inflation-adjusted, wages have finally surpassed their 1989 level
> after stagnating or failing through much of this economic expansion, an
> Economic Policy Institute report indicates. Tight labor markets,
> especially during the past year, have helped raise the wages of workers,
> particularly in the last few years, according to the article "Real Median
> Wages Finally Recover 1989 Level," in the inaugural issue of EPI's
> "Quarterly Wage and Employment Series". By the end of 1998, average real
> wages were 1.6 percent higher than in 1989. Wage growth and low inflation
> have especially helped low-income groups, the report by EPI economist
> Jared Bernstein said. Unemployment levels fell to a 29-year low of 4.3
> percent in 1998, greatly benefiting low- and middle-wage workers,
> according to the report (Daily Labor Report, page A2).
>
> Coal exports to Europe from West Virginia, Kentucky and southwestern
> Virginia have gone into a free fall, and the mine officials and rail
> executives who have lived through many coal boom-and-bust cycles are
> asking now whether the business will ever come back. "The United States
> is probably not going to see the same kind of exports" as in the past,
> says an analyst with Morgan Stanley Dean Witter who warned of a continuing
> decline in coal exports in an August 28 percent that drew protests from
> the railroad industry. At the same time, lowered earnings estimates for
> two major coal-hauling railroads. The decline in export coal began with
> the Asian financial crisis. It was also complicated by myriad economic
> and political factors, including overcapacity in Australia mines, the
> unusually strong dollar, the end of apartheid in South Africa, economic
> chaos in ocean shipping, steel dumping by Eastern Europe, and even the
> revival of "mom-and-pop" coke production in China. Further complicating
> miners lives with a warm winter that reduced domestic coal shipments.
> According to the National Mining Association, overseas exports peaked at
> about 79 million tons in 1996, then declined to 69 million tons in 1997,
> an estimated 60 million tons in 1998 and a projected 58 million tons this
> year. Most of the decline was represented by "steam" used in making
> electricity, but there has also been an acceleration in the decline in
> high-quality U.S. metallurgical coal, used in making steel (The Washington
> Post, May 2, page H1).
>
> A long-spreading gap between the wages of undereducated workers in menial
> jobs and those of skilled college graduates is contributing to another
> gap, in workers' health benefits, a research journal reports. Lending a
> new perspective on swelling numbers of Americans without health insurance,
> an article to be published in the journal "Health Affairs" says that a
> phenomenon feeding the benefits gap is the proliferation of low-wage
> businesses, like stores and restaurants. "Our findings," the authors say,
> "strongly suggest that low-wage families" can often protect themselves
> from losing health insurance "if they find work in firms where a
> substantial share of the employees earn more than they do." The lead
> author, John Gabel, an economist and benefits specialist at the Hospital
> Research and Educational Trust, said in an interview: "The pattern we see
> is that employers that have a high-income work force offer better
> benefits, no matter how you choose to look at it." The article notes that
> after taking inflation into account, wages for high school graduates fell
> 11 percent from 1973 to 1997, while those of college graduates rose 17
> percent. The journal says that the rise in the numbers of uninsured
> Americans, from 38 million in 1992 to 43 million in 1997, has touched most
> segments of the population, but the poor especially (The New York Times,
> page A21).
>
> A growing number of companies -- and not just the high-tech outfits -- are
> quickly learning how to make money in a world of falling prices, says
> Darren McDermott, writing in "The Outlook" column in The Wall Street
> Journal (page 1). In the first quarter of this year, operating income for
> 665 companies in the Dow Jones Global U.S. Index rose nearly 10 percent,
> while inflation, as measured by the CPI, was up a modest 1.6 percent for
> the 12-month period that ended in March. In the 1970s and 1980s,
> companies facing higher labor costs found it easier to raise prices than
> to cut cots. That dynamic has reversed this decade, with help from big
> investments in technology, said Fed Chairman Alan Greenspan in testimony
> before the Congress earlier this year. "...slack in product markets has
> put greater competitive pressure on businesses to hold down prices,
> despite taut labor markets," Greenspan said. That pressure is good,
> economists say, because holding down prices means holding down inflation.
> But it's only good for companies if they can still find a way to make
> money. That's the challenge ahead.
>
>
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