BLS DAILY REPORT, FRIDAY, DECEMBER 6, 1996
RELEASED TODAY:
EMPLOYMENT SITUATION -- Nonfarm payroll employment increased in
November, and the unemployment rate edged up to 5.4 percent. Payroll
employment rose by 118,000, with modest but widespread gains occurring
throughout the private sector. Average hourly earnings rose by 9
cents over the month, following a decline of 1 cent in October ....
COMMISSIONER'S STATEMENT -- In summary, labor market indicators
were mixed in November. Payroll employment continued to grow,
although the pace appears to have slowed from earlier this year.
Employment in virtually all of the major private industry groups
increased modestly over the month, the workweek recouped half of its
October decline, and hourly earnings rose 9 cents. At the same time,
unemployment rose slightly, with the rate edging up to 5.4 percent.
Productivity in the nonfarm business sector slipped 0.3 percent,
seasonally adjusted, in the third quarter of 1996, according to
revised BLS figures. Productivity in the third quarter proved weaker
than original estimates from BLS that showed it inched up by 0.2
percent in the nonfarm business sector ....This was the first decline
in productivity since a 1.2 percent drop during the fourth quarter of
1995 ....(Daily Labor Report, pages 2,D-3)_____Productivity declined
by a revised 0.3 percent in the third quarter. The same report
contained indications of a rise in labor costs ....(New York Times,
page D4)_____Productivity fell 0.3 percent in the third quarter, an
even bleaker performance than originally reported and the first
decline since the end of last year ....(Wall Street Journal, page A2)
DOL announces new claims filed with state agencies for unemployment
insurance benefits fell by a moderate 8,000, seasonally adjusted, to
336,000 in the week ended Nov. 30 ....(Daily Labor Report, page D-1;
New York Times, page D4).
The National Association of Manufacturers predicted U.S. growth next
year will be a moderate 2.5 percent with inflation in check and
continued strength in business equipment spending ....(Daily Labor
Report, page A-16).
The Christmas shopping season got off to a promising start in
November, boosted by the Thanksgiving Day weekend, according to sales
results major chain stores reported ....(Daily Labor Report, page
A-17)_____Modest gains for retailers in November. Sales rise
contrasts with poor 1995 month ....(New York Times, page
D1)_____Retail sales rose in November, but not as strongly as in
October, raising some doubts about the overall strength of the holiday
shopping season ....(Wall Street Journal, page B4)
A New York Times article (page D1) says that energy prices have gone
on a wild ride lately, roiling consumers and industry alike
....Mysterious as this volatility seems, it has a simple explanation.
The oil industry has fundamentally changed the way it does business
-- a shift that began several years ago ....Energy companies used to
rely on fat inventories to meet surges in demand, both seasonal and
the unforeseen. But to cut costs amid uncertainty about the future
price of crude oil, the industry is relying far more on last minute
production. The leaner inventories ... have whipsawed consumers and
industries like trucking and airlines. They have also unsettled the
futures markets ....
CPI REPORTS FROM FRIDAY
Claiming it was biased from the start, private economists say the
final report of the Advisory Commission To Study the Consumer Price
Index is flawed because it failed to look at opinions from economists
who do not believe the CPI overstates inflation. Also, the
appointment of the commission was politically motivated, the
economists say. Economists at the Economic Policy Institute contend
that the Boskin report provides insufficient evidence that the CPI
exaggerates the inflation rate. Economist Audrey Freedman expresses
concerns that the report is putting undue pressure on BLS to change
the CPI. Freedman said, "With this report, Congress can try to force
the BLS to doctor the CPI numbers. I doubt that the politicians will
succeed, because the bureau is historically independent. However, the
campaign is already damaging morale, bruising reputations, and
wastefully diverting BLS budgets and time" ....(Daily Labor Report,
pages 1,A-14,Special Report delivered yesterday).
A coalition of conservative and moderate House Democrats is likely to
continue to press for adjustment of the inflationary expansion of the
CPI during the 105th Congress, Rep. Charles W. Stenholm (D-Texas)
said. The Blue Dog coalition in the House "will continue to advocate
a change in CPI," the congressman told a policy forum sponsored by the
American Council for Capital Formation in Washington. However, the
size of the change is an issue that has not yet been decided
....(Daily Labor Report, page A-13).
The New York Times carries an op-ed article, "A `Technical' Ruse," by
Pete Stark, a Democrat Representative from California and a member of
the Joint Economic Committee. Stark begins, "The Boskin Commission's
conclusion that the Government has been overstating the inflation rate
by 1.1 percent raises some fundamental questions about the purpose of
cost-of-living adjustments in benefit programs. At issue is whether
we want to lock elderly and disabled people into the same standard of
living that prevailed when they retired, or allow their living
standards to improve along with those of other Americans" ....He
concludes that a CPI change will hurt the elderly.
CPI shift a risky political venture, says an AP story in the
Washington Times (page B10). No statistical revision of the many that
are necessary will produce greater economic repercussions than
corrections in the CPI. The reasons why begin with the most obvious
impact, that being the effect on benefits received by millions of
retirees whose financial well-being is tied to CPI changes ....
Federal Reserve Chairman Alan Greenspan called for development of "new
techniques of price measurement" in a speech Thursday in Washington
....Greenspan said it is "crucial" to develop new ways to track prices
"for inflation can destabilize an economy even if faulty price indexes
fail to reveal it" (USA Today, page 1B).
