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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Wally Mastroly who wrote (10296)	12/7/1999 8:48:00 AM
From: Wally Mastroly	Read Replies (2) \| Respond to of 15132

Productivity grew 4.9 % & labor costs fell 0.2 % in 3Q/edit: (The Labor Department had initially estimated growth in productivity -- which can help keep inflation at bay -- at 4.2 percent in the quarter, and labor costs as rising 0.6 percent) cnnfn.com - Some details from bloomberg: bloomberg.com - Some excerpts: >..Productivity at non-financial corporations, a statistic watched by Federal Reserve Chairman Alan Greenspan, rose at a 4.7 percent pace in the third quarter, the biggest increase in a year. Labor accounts for two-thirds of business costs. And advances in productivity -- calculated as an index of worker output per hour -- let companies keep those costs from feeding through to price or trimming profits. Productivity is on track to grow by 2.8 percent this year, the same as in 1998. Since the beginning of 1997, productivity has grown an average annual rate of 2.6 percent. With an unemployment rate at a 29-year-low of 4.1 percent in November, the economy speeding along at a 5.5 percent annual rate in the third quarter and limited pricing power for U.S. companies, businesses are striving to make productivity gains to keep profits rising. Companies have invested heavily in computers and other innovations to boost efficiency and reduce costs. After languishing at about 1 percent in the 1970s and 1980s, productivity growth in all U.S. businesses, except farms, has been above 2 percent the past three years. Such capital investments help explain why the economy has managed to grow almost inflation-free for several years at a pace faster than the 2.5 percent long considered the point at which price increases were likely to accelerate. Federal Reserve officials want to see these productivity gains continue in order to ensure consumer prices stay in check. ''This will be seen as very favorable to the case of those members of the FOMC that believe there is a productivity revival blunting the threat from inflation,'' said John McAuley, economist at Wilkinson Boyd Capital Markets in New Canaan, Connecticut, before the report. Fed policy-makers have already raised interest rates three times this year by a total of three-quarters of a percentage point to ensure inflation doesn't accelerate with economic growth. ''What we're seeing is increases in productivity,'' said William McDonough, president of the New York Fed, last month. ''Our view is that the economy can grow at 3.5 percent a year. As long as the rate of productivity continues to rise, you can have the economy grow faster without inflation. It's clear that there have been fundamental changes in the U.S. economy -- gains in worker productivity, for example -- that allow it to grow faster and unemployment fall further than once thought acceptable, Fed Governor Laurence Meyer said during a speech in New York last month. Still, even if productivity gains are permanent, ''policy- makers have to be alert in the short run to the possibility of overheating,'' he said....< Not to mention: The implicit price deflator for nonfinancial corporations (an alternate measure of inflation) fell 0.3 percent in the quarter and is up 0.4 percent in the past year.

To: Wally Mastroly who wrote (10296)	12/7/1999 10:06:00 AM
From: Wally Mastroly	Respond to of 15132

Social Security needs underestimated... WASHINGTON -- A panel of private experts says Social Security's trustees are underestimating how quickly the cost of paying retirement benefits to Americans will rise along with increases in life expectancy in the next century. The panel said the trustees' current assumption that life expectancy for Americans will reach 81.5 years in 2070 should be boosted to 85.2 -- or 3.7 more years of collecting Social Security benefits per person, on average. If a Social Security payroll tax increase were used to pay for the additional benefits associated with the faster rate of increase in life expectancy, extended over the next 75 years, it would have to be 0.51% starting immediately, the panel said. The bipartisan panel, which included economists, demographers and other experts from business and academia, was convened by the Social Security Advisory Board, created by Congress in 1994 to make recommendations to the board of trustees of the nation's retirement program.