BLS DAILY REPORT, THURSDAY, MARCH 13, 1997 RELEASED TODAY: Unemployment rates for most states showed little movement in January, as 32 states reported changes of 0.3 percentage point or less in either direction from December. The national jobless rate was essentially unchanged at 5.4 percent. Nonfarm payroll employment increased in 21 states in January .... __President Clinton has abandoned the idea of establishing an independent panel to reduce the cost-of-living adjustments for Social Security and other federal benefits, after more than a week of unsuccessful effort to build bipartisan support for it. Some Republican leaders warned that a Clinton retreat could doom chances for a deal this year to balance the budget by 2002. But White House officials said Clinton was backing away from the idea because of overwhelming opposition from Democratic and GOP lawmakers who fear a public outcry if Washington scales back increases in popular federal benefit programs ....(Washington Post, page 1). __Legislating a change in the CPI is the wrong tactic to take, the chairman of a commission that studied the measure tells the Senate Budget Committee. Instead, Stanford University economist Michael Boskin says Congress should make appropriate adjustments to government entitlement programs and tax brackets that reflect what the Boskin Commission found was a CPI overstatement of inflation. "While we concluded changes in the CPI overstate inflation by 1.1 percent, that does not mean we think the BLS can fix that in a short time," Boskin said ...."You shouldn't expect magic from the BLS," he said ....Although committee chairman John R. Kasich (R-Ohio) attempted to press BLS Commissioner Katharine Abraham to give her opinion on how much the CPI overstates inflation, Abraham refused. "That's a policy call that you would have to make," she said. "That's not something on which I can give an opinion. It would be extremely inappropriate to give a response on policy matters" ....In a separate action, Sens. William Roth (R-Del) and Daniel Patrick Moynihan (D-NY) introduced a bill on March 11 that would create a Cost-of-Living Board to decide what the inflation adjustment is each year for federal benefit programs ....(Daily Labor Report, page AA-1). Work-related injuries and illnesses dropped to their lowest rate in nearly a decade in 1995, with many of the nation's more hazardous industries -- such as construction and manufacturing -- reporting a marked decline in cases, BLS reported ....(Daily Labor Report, page D-1). __The U.S. economy continued to expand at a moderate pace in February, buoyed by healthy retail sales, strong housing markets, and robust manufacturing activity, the Federal Reserve reported. And, while labor markets remained tight in most areas of the country, both wage gains and price pressures remained modest, the Fed said in its latest "beige book" ....(Daily Labor Report, page D-17). __The nation's remarkable combination of low unemployment, low inflation, and moderate economic growth continued into the first two months of this year, with little evidence that anything is about to change ....Despite tight labor markets in nearly every Fed district, nominal wage gains show no signs of breaking out of the 3 to 4 percent range that has been cited in the last several reports. The banks reported some regional variations. Some areas are seeing persistent wage gains in certain fast-growing sectors, while others reported a lessening of wage pressures. Apparently, the higher wages paid to computer programmers, construction workers, employees of temporary help agencies, hotel workers, and, in some areas, for entry level jobs in retailing aren't feeding through to higher prices for two reasons: competition and gains in productivity ....(Washington Post, page E2). __Despite a persistently low unemployment rate, American workers have generally been unable to win significantly higher pay. Further, companies have managed to keep costs in check with better productivity, leaving the economy making only moderate gains ....(New York Times, page D4). __Businesses can't find people to fill jobs, but still aren't willing to woo them with higher salaries. Because of this stinginess, prices have stayed "temperate" in the past six weeks ....The healthy economy is making it difficult for employers to find and retain workers, particularly engineers and construction, high-tech, and skilled manufacturing workers ....The result is scattered evidence of some pay increases ....(Wall Street Journal, page A2). __A study by two Harvard Medical School physicians and published in the New England Journal of Medicine found that the nation's for-profit hospitals spend more money on administration and less on workers who care for patients than nonprofit or government-owned hospitals ....The study was challenged in an accompanying editorial in the Journal ....A chart shows that, on average, profits accounted for 30 percent of for-profit hospital costs in 1994, compared with 17 percent of costs for nonprofit hospitals ....(Washington Post, page E2). __In separate studies, costs for hospital care are debated. Investor-owned hospitals have significantly higher administrative costs than nonprofit hospitals, in part because they are less efficient, two Harvard health care researchers said in a study disputed by the American Hospital Association. At the same time, a Federal advisory panel said in a separate study that hospitals of all types had radically reduced the growth of their total costs. Taken together, the studies suggest that hospital costs have leveled off, but that administrative costs account for a growing share of the total ....New data from the federal panel, the Prospective Payment Assessment Commission, which advises Congress on Medicare payments to hospitals, show remarkable reductions in the growth of hospital operating costs in the last three years. Such costs, which rose faster than the CPI for many years, are now rising less than consumer prices in general, the panel said ....(New York Times, page D2). Almost one in four people over age 16 in the United States and Canada now use the Internet, more than twice the number of people who were online 18 months ago, according to a study by Nielsen Media Research and an electronic commerce industry group called CommerceNet ....The survey, which was first conducted in the fall of 1995 and generally is considered within the computer industry to be one of the most comprehensive studies of Internet usage, counted people who said they used the global computer network at least once in the month before they were questioned ....(Washington Post, page E3). .... DUE OUT TOMORROW: Producer Price Indexes -- February 1997
