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USUAL WEEKLY EARNINGS OF WAGE AND SALARY WORKERS FOURTH QUARTER 2018

The Free Press WV

Median weekly earnings of the nation’s 115.9 million full-time wage and salary workers were $900 in the fourth quarter of 2018 (not seasonally adjusted), the U.S. Bureau of
Labor Statistics reported today. This was 5.0 percent higher than a year earlier, compared with a gain of 2.2 percent in the Consumer Price Index for All Urban Consumers (CPI-U) over the same period.

Data on usual weekly earnings are collected as part of the Current Population Survey, a nationwide sample survey of households in which respondents are asked, among other
things, how much each wage and salary worker usually earns.  Data shown in this news release are not seasonally adjusted unless otherwise specified.


Highlights from the fourth-quarter data:

  —Median weekly earnings of full-time workers were $900 in the fourth quarter of 2018. Women had median weekly earnings of $794, or 80.0 percent of the $993 median for men.

  —The women’s-to-men’s earnings ratio varied by race and ethnicity. White women earned 79.7 percent as much as their male counterparts, compared with 86.0 percent for Black women, 74.6 percent for Asian women, and 82.9 percent for Hispanic women.

  —Among the major race and ethnicity groups, median weekly earnings of Blacks ($712) and Hispanics ($684) working at full-time jobs were lower than those of Whites ($931) and Asians ($1,095). By sex, median weekly earnings for Black men were $773, or 75.5 percent of the median for White men ($1,024). Median earnings for Hispanic men were $736, or 71.9 percent of the median or White men. The difference was less among women, as Black women’s median earnings were $665, or 81.5 percent of those for White women ($816), and earnings for Hispanic women were $610, or 74.8 percent of those for White women. Earnings of Asian men ($1,256) and women ($937) were higher than those of their White counterparts.

  —By age, median weekly earnings were highest for men ages 55 to 64 at $1,191. Usual weekly earnings were highest for women ages 35 to 64: median weekly earnings were $877 for women ages 35 to 44, $876 for women ages 45 to 54, and $895 for women ages 55 to 64. Men and women ages 16 to 24 had the lowest median weekly earnings, $609 and $539, respectively.

  —Among the major occupational groups, persons employed full time in management, professional, and related occupations had the highest median weekly earnings—$1,505 for men and $1,102 for women. Men and women employed in service jobs earned the least, $675 and $512, respectively.

  —By educational attainment, full-time workers age 25 and over without a high school diploma had median weekly earnings of $543, compared with $746 for high school graduates (no college) and $1,340 for those holding at least a bachelor’s degree. Among college graduates with advanced degrees (master’s, professional, and doctoral degrees), the highest earning 10 percent of male workers made $3,909 or more per week, compared with $2,884 or more for their female counterparts.

  —Seasonally adjusted median weekly earnings were $897 in the fourth quarter of 2018, little changed from the previous quarter ($893).


Annual Averages for 2017 and 2018

In addition to the data for the fourth quarter, this news release includes 2017 and 2018 annual averages on median weekly earnings for major demographic and occupational groups, and 2018 annual average data for educational attainment groups.

U.S. IMPORT AND EXPORT PRICE INDEXES - DECEMBER 2018

The Free Press WV

Prices for U.S. imports decreased 1.0 percent in December, the U.S. Bureau of Labor Statistics reported today, after a 1.9-percent fall the previous month. Lower fuel prices drove the decline in December, and nonfuel prices recorded no change. U.S. export prices fell 0.6 percent in December following a 0.8-percent drop in November.


Imports

U.S. import prices declined 1.0 percent in December, after decreasing 1.9 percent in November and rising 0.5 percent in October. The November drop was the largest monthly decline since the index fell 3.2 percent in January 2015. Prices for imports decreased 0.6 percent in 2018 following a 3.2-percent increase the previous year. The decline in 2018 was the first calendar-year drop since import prices fell 8.3 percent in 2015.

Fuel Imports: Prices for import fuel declined 9.2 percent in December, after a 13.3-percent drop the previous month. The December decrease was driven by an 11.6-percent decline in petroleum prices which more than offset a 30.3-percent advance in natural gas prices. Import fuel prices fell 10.4 percent in 2018 following a 21.8-percent increase the previous year. The 2018 decline is the first calendar-year decrease since 2015, when import fuel prices fell 41.0 percent. In 2018, a 14.0-percent drop in petroleum prices more than offset a 67.6-percent increase in prices for natural gas.

All Imports Excluding Fuel: Prices for nonfuel imports recorded no change in December, after declining 0.3 percent in November. Higher prices for consumer goods; automotive vehicles; and foods, feeds, and beverages offset price declines for capital goods and nonfuel industrial supplies and materials. Nonfuel import prices advanced 0.5 percent in 2018 following a 1.3-percent rise in 2017. The price index for nonfuel imports has not recorded a calendar-year decline since a 3.4-percent drop in 2015. In 2018, higher prices for nonfuel industrial supplies and materials; consumer goods; and automotive vehicles drove the increase in nonfuel import prices.

Nonfuel Industrial Supplies and Materials: Prices for nonfuel industrial supplies and materials edged down 0.1 percent in December, after falling 0.2 percent the previous month. A 0.9-percent decline in prices for chemicals drove the December decrease.
Finished Goods: Finished goods prices were mostly up in December. Prices for consumer goods and automotive vehicles each ticked up 0.1 percent. In contrast, capital goods prices edged down 0.1 percent.

Foods, Feeds, and Beverages: Foods, feeds, and beverages prices rose 0.1 percent in December, after declining 2.2 percent the previous month. The December increase was led by a 10.9-percent advance in vegetable prices.


Exports

U.S. export prices fell 0.6 percent in December following a 0.8-percent decrease in November. Nonagricultural prices declined in December, more than offsetting higher prices for agricultural goods. Despite the December downturn, U.S. export prices increased 1.1 percent in 2018. The price index for U.S. exports has not recorded a calendar-year decrease since falling 6.6 percent in 2015.

Agricultural Exports: Prices for agricultural exports advanced 3.9 percent in December, the largest increase for the index since a 4.8-percent rise in August 2012. The December advance follows a 1.7-percent rise in November and a 0.1-percent drop in October. Price increases for soybeans and nuts contributed to the December advance, more than offsetting lower fruit prices. Agricultural export prices rose 2.5 percent in 2018, after increasing 1.9 percent in 2017. The 2018 increase was the largest calendar-year advance since the price index for agricultural exports rose 13.4 percent in 2012.

All Exports Excluding Agriculture: Prices for nonagricultural exports decreased 1.1 percent in December, after declining 1.0 percent in November and rising 0.5 percent in October. The December drop matched the decrease in December 2015; those were the largest monthly declines since the index fell 1.3 percent in August 2015. Lower prices for nonagricultural industrial supplies and materials led the December decrease, more than offsetting rising consumer goods and automotive vehicles prices. Despite the December decline, nonagricultural export prices advanced 1.0 percent in 2018.

Nonagricultural Industrial Supplies and Materials: The price index for nonagricultural industrial supplies and materials decreased 3.4 percent in December, the largest monthly decline since falling 3.7-percent in August 2015. An 8.4-percent drop in prices for export fuel drove the December decline.

Finished Goods: Finished goods prices mostly rose in December. The price indexes for consumer goods and automotive vehicles each ticked up 0.1 percent. Export capital goods prices recorded no change in December following a 0.1-percent drop in November. In 2018, automotive vehicles export prices rose 0.9 percent, the largest calendar-year increase since advancing 2.6 percent in 2011.


Measures of Import and Export Prices by Locality

Imports by Locality of Origin: The price index for imports from China recorded no change in December. Prices for imports from China decreased 0.2 percent in 2018 and have not risen on a calendar-year basis since advancing 3.6 percent in 2011. Import prices from Japan edged down 0.1 percent for the second consecutive month in December. Despite the monthly decreases, prices for imports from Japan rose 1.0 percent in 2018. Prices for imports from Canada declined 1.5 percent in December and fell 6.1 percent in 2018, the largest calendar-year drop since a 15.1-percent decrease in 2015. The price index for imports from Mexico declined 0.5 percent in December and prices for imports from the European Union fell 0.1 percent over the same period.

Exports by Locality of Destination: Export prices to China decreased 0.3 percent in December following a 0.1-percent drop the previous month. The price index for exports to China declined 1.5 percent in 2018. Prices for exports to Japan fell 0.2 percent in December, after recording no change in November and rising 0.2 percent in October. In 2018, export prices to Japan rose 0.5 percent. Prices for exports to Canada increased 2.2 percent in December, and advanced 7.3 percent in 2018. The price index for exports to Mexico fell 0.9 percent in December. Despite the monthly decrease, export prices to Mexico increased 1.6 percent in 2018. Prices for exports to the European Union declined 0.7 percent in December, after rising in each of the previous 3 months. The December drop was the largest 1-month decrease for export prices to the European Union since the index was first published in December 2017. In 2018, export prices to the European Union advanced 3.2 percent.

Terms of Trade Indexes: Terms of Trade indexes are based on country, region, or grouping and measure the change in the purchasing power of exports relative to imports. The index for U.S. terms of trade with China decreased 0.3 percent in December, driven by decreasing export prices to China. Overall, the U.S. terms of trade with China declined 1.3 percent in 2018. The U.S. terms of trade with Japan edged down 0.1 percent in December following 0.1-percent increases the previous 2 months. In 2018, the index for U.S. terms of trade with Japan fell 0.5 percent. The U.S. terms of trade with Canada rose 3.8 percent in December, and increased 14.3 percent in 2018. The index for U.S. terms of trade with the European Union declined 0.6 percent in December and the U.S. terms of trade with Mexico fell 0.4 percent. Despite the monthly decreases, the U.S. terms of trade with the European Union and Mexico each advanced 1.8 percent in 2018.


Import and Export Services

Imports: The index for import air passenger fares rose 7.6 percent in December following increases of 0.7 percent in November and October. Higher Asian and Latin American/Caribbean fares drove the rise in December. Import air passenger fares advanced 1.8 percent in 2018, after increasing 4.2 percent in 2017. Prices for import air freight decreased 2.7 percent in December following a 0.7-percent advance the previous month. The index for import air freight prices rose 4.1 percent in 2018 and has not recorded a calendar-year decrease since falling 3.1 percent in 2015.

Exports: Export air passenger fares advanced 1.4 percent in December, after edging up 0.1 percent the previous month. Higher Asian and European fares contributed to the monthly increase. The index for export air passenger fares fell 5.0 percent in 2018 following a 5.8-percent drop in 2017. Prices for export air freight declined for the second consecutive month in December, edging down 0.1 percent. Despite the monthly decrease, export air freight prices rose 3.4 percent in 2018, the largest calendar-year increase since a 5.8-percent advance in 2014.

PRODUCER PRICE INDEXES - DECEMBER 2018

The Free Press WV

The Producer Price Index for final demand fell 0.2 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.1 percent in November and 0.6 percent in October. (See table A.) On an unadjusted basis, the final demand index moved up 2.5 percent in 2018, the same as in 2017.

In December, 80 percent of the decrease in the final demand index is attributable to a 0.4-percent decline in prices for final demand goods. The index for final demand services edged down 0.1 percent.

The index for final demand less foods, energy, and trade services was unchanged in December following a 0.3-percent rise in November. In 2018, prices for final demand less foods, energy, and trade services advanced 2.8 percent following a 2.3-percent increase in 2017.


Final Demand

Final demand goods: The index for final demand goods moved down 0.4 percent in December, the same as in November. In December, the decline was the result of a 5.4-percent drop in the index for final demand energy. In contrast, prices for final demand foods advanced 2.6 percent, and the index for final demand goods less foods and energy rose 0.1 percent.

Product detail: Leading the December decrease in the index for final demand goods, gasoline prices dropped 13.1 percent. The indexes for diesel fuel, basic organic chemicals, jet fuel, residual fuels, and beef and veal also moved down. Conversely, prices for fresh fruits and melons jumped 48.9 percent. The indexes for construction machinery and equipment and for residential natural gas also increased.

Final demand services: Prices for final demand services edged down 0.1 percent in December after increasing for three straight months. The decline was led by a 0.3-percent decrease in the index for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services fell 0.2 percent. In contrast, the index for final demand services less trade, transportation, and warehousing inched up 0.1 percent.

Product detail: The December decrease in prices for final demand services was led by margins for food retailing, which fell 2.5 percent. The indexes for cellular phone and other wireless telecommunication services, automotive fuels and lubricants retailing, residential real estate loans (partial), and airline passenger services also moved lower. Conversely, prices for guestroom rental rose 2.9 percent. The indexes for inpatient care, machinery and equipment parts and supplies wholesaling, and long-distance motor carrying also increased.

How’s the US economy doing? Shutdown makes it harder to say

The Free Press WV

The partial shutdown of the U.S. government has begun to make it harder to assess the health of the economy by delaying or distorting key reports on growth, spending and hiring.

Government data on home construction and retail sales, for example, won’t be released next week because staffers who compile those reports have been furloughed. The retail sales report provides a snapshot of consumer spending, which fuels more than two-thirds of the economy. With Macy’s and Kohl’s having said Thursday that their holiday sales were weaker than expected, a broader gauge of retail spending would have provided important clarity.

In addition, the next report on the economy’s overall growth, set for Jan. 30, won’t be released if the shutdown remains in effect. Even if the government has fully reopened by then, federal workers won’t likely have had enough time to produce the scheduled report on the nation’s gross domestic product.

Not all agencies are closed. Congress approved funding last year for the Labor Department, so the government’s next monthly jobs report will be released as scheduled on Feb. 1. But it’s unclear how long the department will be able to issue jobs reports — the most closely watched barometer of the economy — after that.

Though the economy remains healthy in most respects, there are rising concerns that growth could slow or even stall in coming months. The trade war between the United States and China, which has helped depress global growth, is likely slowing business investment. The stimulus from the Trump administration’s tax cuts is expected to fade.

And borrowing costs have risen since the Federal Reserve raised short-term interest rates four times last year. Before rebounding this week, stock markets had plummeted roughly 16 percent from their peak Oct. 2.

Many economists increasingly see the shutdown, should it persist, as a drag on the economy. Michael Feroli of J.P. Morgan has downgraded his forecast for growth in the first three months of 2019 because of the shutdown. He now expects the economy to grow at a 2 percent annual rate, down from his previous estimate of 2.25 percent.

The shutdown is costing the economy about $1.2 billion a week, according to Standard & Poor’s. Some of that loss will be regained after federal workers eventually receive back pay for the time they missed. But many government contractors won’t be made whole. And lost business — such as scheduled hotel stays from trips to national parks that won’t be taken — may not be made up.

Fed officials are now stressing their flexibility on rate hikes, emphasizing that they will be patient and their policy “data dependent.” By this, the Fed means that the government’s latest readings on hiring, inflation and growth will factor heavily in its rate decisions. Yet much of that data will now be unavailable — to the Fed or anyone else.

“For us, one of the biggest effects of the shutdown has been around data,” Raphael Bostic, president of the Fed’s Atlanta regional bank, said Wednesday. “We’re worrying about that.”

Even some reports that are released on schedule are likely to be distorted by the shutdown. For example, the January jobs report may show an artificially high unemployment rate and low employment figure. That’s because up to 380,000 federal employees who aren’t working or being paid during the shutdown — but who will return to work afterward — could be counted as unemployed for January.

If so, that would raise the unemployment rate by 0.2 percentage point, estimated Ben Herzon, an economist at Macroeconomic Advisers, a forecasting firm. And the monthly job count could decline by 380,000 if the shutdown continues through the end of January, Herzon said. That could push the monthly job figure into negative territory.

If all the federal workers eventually receive back pay, as occurred after previous shutdowns, then the January jobs report would later be revised to restore those 380,000 jobs, according to the Labor Department’s Bureau of Labor Statistics.

Future jobs reports could be jeopardized, too, if the government remains shut down. The Census Bureau conducts the monthly surveys that the BLS uses to calculate the unemployment rate. Census is part of the Commerce Department, which remains closed during the shutdown.

The BLS wouldn’t say whether data collection will continue beyond January if the shutdown continues.

Other economic reports have already been missed. They include a monthly report on factory orders that was scheduled for Monday. That report typically provides insights into how much U.S. companies are spending on large equipment.

Inflation data will also be affected: The consumer price index was released Friday morning as scheduled, because it was prepared by the Labor Department. But the Fed’s preferred inflation gauge is published by Commerce’s Bureau of Economic Analysis, which is closed.

And because the Agriculture Department is closed, future reports on wholesale prices and import prices won’t include farm-related data, the BLS said Thursday.

A report on the number of people seeking unemployment benefits, considered a nearly real-time reflection of layoffs, is still being published. But it could be distorted by the shutdown: Nearly 5,000 federal employees sought benefits two weeks ago, according to the latest data available, roughly five times the usual figure.

And only a portion of the government’s report on productivity, or output per hour worked, will be released Feb. 6, the Labor Department said. That’s because that report requires data on the growth of GDP, the broadest measure of the economy.

Even after the government fully reopens, weeks will likely be needed before all the postponed reports can be prepared and released.

“It may take some time to get a ‘clean’ read on the economy,” economists at Bank of America Merrill Lynch said Thursday.

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