BLS DAILY REPORT, MONDAY, MAY 15, 2000
__Producer prices for finished goods fell 0.3 percent last month as prices
charged by oil refiners for products such as gasoline and home heating oil
recorded their largest decline in 9 years, BLS reported. Sharp increases in
energy costs caused 1 percent increases in the producer price index in
February and March. More recently, crude oil prices have risen again
somewhat, so that no large decline in the PPI is likely to appear when May's
figures are released next month, analysts said. ... (John M. Berry in
Washington Post, May 13, page E1).
__Wholesale prices fell in April for the first time in 14 months as energy
costs took their biggest plunge in 9 years, more than outweighing a sharp
jump in food prices. But even with good news on inflation, economists
expect the Federal Reserve to push interest rates higher on Tuesday. The
Producer Price Index, which measures inflation pressures before they reach
consumers, dipped an expected 0.3 percent last month, after having shot up
in February and March. Outside the volatile energy and food categories, the
core rate of inflation in April rose for the second consecutive month by 0.1
percent, also matching many analysts' forecasts. ... (Associated Press in
New York Times, May 13, page B3).
__After months of increasingly worrisome inflation data, market-watchers
finally got some good news with a report showing that wholesale prices fell
in April for the first time in more than a year. But the report may not be
enough to deter the Federal Reserve from taking more aggressive steps to
cool the nation's economy. ... (Yochi J. Dreazen in Wall Street Journal,
page A14).
Small businesses across the United States have begun to raise prices
aggressively, passing along their higher labor and raw material costs in a
sign that inflation is heating up after years of being under control.
One-quarter of small businesses surveyed reported raising prices in April,
as opposed to the 7 percent who said they cut prices, according to a monthly
survey of small businesses by the National Federation of Independent
Businesses, the nation's largest small business lobbying organization with
more than 500,000 members. That marks the second month in a row that price
increases among small businesses were more than triple the number of price
reductions, representing the strongest evidence of inflation that the survey
has found in more than a decade. ... (Wall Street Journal, page A2).
Jerry J. Jasinowski, president of the National Association of Manufactures,
says in the "Letters to the Editors" feature of The Wall Street Journal
(page A51) "In regard to your May story 'Industry Focus -- Manufacturers
Pass on Price Increases to Consumers': Manufacturers have encountered a
series of cost increases over the past few months, ranging from higher
energy prices to employee benefit costs. But rather than pass them to
consumers, firms are attempting to engineer them out. In this respect, the
prices of manufactured goods have been rising more slowly than the overall
inflation rate, and in some sectors, such as computers, prices continue to
decline. The unlikelihood of firms passing costs through to prices is
opposed by basic price theory, which states that firms do not control
prices, only the production process. In a competitive economy, the price is
set by the market (specifically the price is set by the intersection of the
supply and demand curves). Most industrial firms do not possess anything
like the sort of monopoly power required to pass costs through." ...
The Washington Post's feature "Teacher Says" feature (page C4) headlined
"Helping Kids Make Career Course Corrections" recommends the Department of
Labor's Web site, America's Job Bank at www.ajb.org.
DUE OUT TOMORROW:
Consumer Price Index -- April 2000
Real Earnings_ April 2000
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