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To: larry who wrote (19983)	4/7/2001 4:46:25 PM
From: t2	Respond to of 24042

The loss of jobs is probably higher in high tech industries creating more available employees competing for fewer jobs. That is probably why so many FED members are not paying attention to inflation and wage inflation increases. They are basically saying that they are ignoring it in a period where there seems to be accelerating rates of job losses. Some analyst--I think his name is Lachman Riathon (or something like that) who shows up on CNBC with Ron Insana showed charts of how inflation is a non-factor when the economy had been slowing in past periods (since 1980 or so). Inflation ticks up initially and that is a normal pattern. The supply demand equation will fix that on its own. In the first leg of the recovery, when hiring increases--that is probably when we see the increases in wages. However, in the near term, I doubt we will see big wage increases unless a company like Microsoft (for example) is getting employees that are highly skilled but were lost to start ups. Those type of employees are probably worth going after with big pay packages anyways. That Lucent cut and pay raise seems very odd. They must be really concerned about keeping key employees; worries about bankruptcy etc. may all be behind their announcement.