BLS DAILY REPORT, FRIDAY, DECEMBER 13, 1996 __A continued surge in energy prices drove the CPI up 0.3 percent, seasonally adjusted, in November, BLS reports. Most analysts see the report as moderate, since the core rate -- minus volatile energy and food components -- rose 0.2 percent in the month. But some economists voice concern that, the longer energy prices continue to rise, the more likely the price hikes will work their way through the inflationary pipeline. During the 12 months ended in November, the CPI-U rose 3.3 percent, compared with just 2.5 percent for all of 1995 ....(Daily Labor Report, pages 2,D-3). __Writing in The Washington Post (page D3), John M. Berry says that a set of economic reports showed the economy growing moderately while inflation remains low, a combination analysts said guarantees that the Fed policymakers will make no change in interest rates when they meet next week. The Labor Department said consumer prices rose 0.3 percent last month, the third consecutive increase of that size, largely because of a 1.2 percent jump in energy prices ....The Commerce Department said that a big 2.6 percent drop in auto sales caused overall retail sales to fall 0.4 percent last month .... __Writing in The New York Times (page D6), Robert D. Hershey Jr. says that shoppers kept a wary eye on spending as this year's late holiday shopping season got under way. Inflation clearly is not to blame for the sluggish spending .... __Retailers continued to hold the line on prices in November, amid surprisingly sluggish consumer depand. The CPI increased a modest 0.3 percent last month, the same pace recorded in the previous two months. Yesterday's report was the last major piece of pricing news to be released before the Fed policymakers meet Tuesday, and it appears to give the nation's inflation watchdogs reason to avoid tightening monetary policy for at least a bit longer ....(Wall Street Journal, page A2). Both hours worked and weekly pay rebounded in November, resulting in a 1.0 percent gain in inflation-adjusted earnings for most U.S. workers, according to BLS. It was the largest monthly gain since last August, when real pay also rose 1.0 percent ....(Daily Labor Report, page D-15). Americans don't recoil at adjusting the CPI downward, says The Wall Street Journal in its "Washington Wire" column (page A1). The public is split on revising the index, which a commission recently said overstates inflation. But the 47 percent in favor -- compared with 43 percent against -- is surprising, since respondents were told this fix would reduce the cost-of-living increases in programs like Social Security and veterans benefits. Veteran groups such as the Retired Officers Association prepare to fight changes. Senate Finance Chairman Roth plans hearings after the first of the year, but actual legislative activity seems distant. House Ways and Means head Archer has no hearings slated ....Clinton aides strive to leave the door open to making "the CPI as accurate as possible" without endorsing anything. But they find that nuance hard to convey. Treasury Secretary Rubin acknowledged that questions surrounding biases in the CPI may curb interest in next month's launch of inflation-indexed Treasury bonds ....(Wall Street Journal, page B15A). Senators Roth and Moynihan said in a Dec. 11 letter that recent remarks by Treasury Secretary Rubin [on Meet the Press] make the senators optimistic the White House is serious about considering an adjustment to the CPI and will not politicize the issue ....Separately, OMB Director Frank Raines on Dec. 11 said the White House already is talking to members of the Boskin commission and consulting specialists both inside and outside the government in search of a consensus to recommend to the president. That review has no timetable, and all options are being explored, he told reporters ....(Daily Labor Report, page A-5). The Congressional Budget Office has released preliminary economic assumptions that improve the outlook for the budget deficit over the new few years, congressional aides say ....The CBO expected the CPI for GDP to rise at a higher rate than it has done recently, when large declines in computer prices and other factors held back its growth ....It also estimated that the unemployment rate would be 5.8 percent if the economy were operating at its estimated potential. But because the GDP is expected to fall slightly below potential, CBO estimated that the unemployment rate will eventually reach 6 percent. Between 1996 and 2007, real GDP is expected to grow at an average rate of 2.1 percent (Daily Labor Report, page A-11). For the third consecutive week, initial claims for unemployment insurance benefits decline, falling 13,000 to a seasonally adjusted 317,000, according to the Labor Department ....(Daily Labor Report, page D-1)_____The decline indicated that the labor market has strengthened in recent weeks ....The new level was the lowest since last August (Washington Post, page D3). A rearrangement of Senate Labor and Human Resources subcommittee jurisdictions that transfers initial Senate responsibility for labor issues from the full committee to the subcommittee level was announced by Sen. James M. Jeffords (R-Vt), the incoming chairman ....Details of the subcommittee jurisdictions were still being worked out, according to the committee spokesman. Presumably ... the new subcommittee on labor and training most likely will be responsible for ... labor statistics ....Subcommittee chairmen and members had not been selected ....(Daily Labor Report, page A-7).
