Glitch Causes Early Release of Economic Data
By Tim Smart
Washington Post Staff Writer
Wednesday, January 13, 1999; Page E1
For the second time in three months, the Bureau of Labor
Statistics yesterday prematurely released key economic data by
posting it on the Internet.
A computer glitch resulted in the early release of the department's
report on prices charged by producers of finished goods last
month and last year – information that was not due to be
published until today and that could be worth millions of dollars
to stock and bond traders fortunate enough to spot it. That
foul-up followed the premature release in November of the
October unemployment figures.
Economists, however, said there was no indication that the mistake played any part in yesterday's broad stock
market decline, which traders attributed to profit-taking and a correction in the values of some Internet and
technology stocks.
The average price charged by manufacturers and other producers of goods in the United States rose by a sharp
0.4 percent in December, the largest increase in 14 months. However that increase was principally attributed
to a 30.7 percent surge in the wholesale price of cigarettes. Tobacco companies have been raising cigarette
prices to offset the costs of settling multibillion-dollar lawsuits.
Overall for 1998, the department's producer price index fell 0.1 percent, after a 1.2 percent drop in 1997,
marking the first back-to-back annual declines in the index since the government began compiling it in 1947.
"Inflation is under control," said Chris Varvares, president of Macroeconomic Advisers in St. Louis.
In recent months, increases in two products that are not consumed by everyone – prescription drugs and
cigarettes – have led to increases in the monthly rate of the index.
Without the cigarette price increase, and excluding the volatile food and energy sectors, the index declined 0.1
percent in December, BLS experts said. If drugs and cigarettes are taken out of the yearly numbers, a BLS
economist said, the decline for 1998 would have been 1.9 percent.
The inadvertent release of the PPI, agency officials said, appeared to be caused by a computer program flaw.
Bureau senior economist William Parks said the agency discovered the inadvertent posting on the its Web
site (stats.bls.gov) yesterday sometime after 1 p.m. and believes the data was available to the public for about
90 minutes. That was when the agency removed the information temporarily, then decided to release it again
at about 5 p.m.
Government economic officials go to great lengths to prohibit the premature release of key economic data,
such as that reflecting employment and inflation levels, because changes in the data can affect the value of
stocks and bonds, and traders can act upon the information. The December PPI was scheduled for release at
8:30 this morning.
"It was a flawed programming design," Parks said. "It was not human error. Our systems people are looking
at it."
In November, when the employment numbers were released inadvertently, "that was more the case of
somebody pushing a button," Parks said.
At that time, BLS Commissioner Katharine G. Abraham termed the glitch "a serious failure of management
control" and explained that it occurred when a staffer loaded the data onto an internal agency computer not
realizing it would be transmitted instantly to the World Wide Web.
The release was not the first premature delivery of sensitive economic data. In January 1997, Federal Reserve
Board report on economic conditions around the country was released two hours ahead of schedule because no
one had informed the Fed's computer specialists that the release time for the information had been pushed back
two hours from its prior noon release.
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