The Republican from Springfield, Massachusetts (2024)

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UnvHid 1 UPenEn 222 Urcarc 17'4 14 UlahMd 12M Band 4'4 Vi VLSI 10M Vi fj VMSSL Jia 4'4 VMX 1'4 3 16 it is Vaicom UM '4 VaildLg 3 Valien 27M ft ValyBc 112 VlyCa 80 24ft vSbcp 136 22ft ft ValNII '4 Valmnt $26 20'4 ft ValMer 13'4 Vened 10 ft Vordp 24M VRE l68e 7 VariCre 04 3 ft Varllrn '4 Varlen 60 15ft '4 VeioBd 6'4 vt Vencor 11 '4 VenCly 8 Verlfne 251 j'feh VerlexC 4 JiVt Economic figures often paint inaccurate picture EDITOR'S NOTE Gross ns tlonal product retail sales con sumer prices productivity home sales factory orders trade unem ployment these are among the economic barometers systemati cally tracked by the federal gov ernment to help determine the overall direction and not pointing to a recession But are these numbers reliable? This third part of a four part se ries explains why commonly used federal measurements of econom ic performance are drawing in creased criticism By MARTIN CRUTSINGER AP Economics Writer WASHINGTON The govern number mills are in trou ble At a time when the US econ omy has never been more com plex federal statisticians are los ing the ability to track the changes The official statistics report that the nation is currently in the midst of a period of unsurpassed prosperity a peacetime record of 7 years without a recession But private economists say many of the statistics spewed by the government each month that purport to track the economy are seriously flawed Some are so sus pect that analysts ignore them in preparing forecasts rather than face embarrassment when the government totally revises its original report is being rewritten on a monthly said Allen Sinai chief economist of the Boston Co makes it very hard for private sector analysts and public policy makers to come to correct conclu Take the chagrin caused last year with the monthly report on retail sales The government first reported retail sales fell by 01 percent in May 1989 only to dis cover belatedly that the survey had overlooked $14 billion in sales Thus a small decline turned into a sizable 08 percent in crease But the problem stop there The initial erroneous report was picked up in the broadest measure of economic ac tivity the gross national prod uct which originally showed an anemic 17 percent growth rate during the spring After the error in retail sales was caught the GNP report was revised to show the economy growing at a much more respect able 25 percent However the correction came too late to stop policy makers at the ederal Re serve from acting to cut interest rates for fear the economy was headed into recession A number of economists believe that the ed has been forced to keep interest rates higher this year because of that mistaken easing in credit last year Bad data triggers more than bad government policy Millions of dollars can be lost in seconds on Wall Street based on jit tery response to the latest report even though bad news one month may be revised to look significant ly better a month later fits You become very leery about using these numbers but they are all you have so you grasp at them and hope the government make a fool of you in the next 30 days Paul Getman economist The Consumer Price Index af fects the pocketbook of virtually every American in a different way The CPI the most closely watched measure of inflation is used to adjust the monthly payments of 38 million Social Security beneficiaries 20 million food stamp recipients 35 million federal retirees and at least 85 million workers covered by collective bargaining contracts that link wage increases to CPI in creases Even the amount of taxes we pay is affected because the CPI is used each year to adjust rates to prevent inflation induced tax in creases known as In studying government data everyone from the National Acad emy of Sciences to the National Association of Business Econo mists has reached the same con clusion there are serious prob lems regarding the accuracy and usefulness of the statistics A survey last year of NABE members found 72 percent were unhappy with the quality of gov ernment data up from 61 percent the year before Retail sales GNP and merchandise trade reports were identified as the worst of fenders Michael Boskin chairman of the Council of Eco nomic Advisers and head of an ad ministration statistics task force exploring the issue said that de teriorating statistics partly reflect a more complex economy we as a nation produced mostly things like steel and bush els of wheat output was easy to Boskin said of steel and bushels of But today in an economy where 75 percent of the output is in ser vice industries ranging from banks and hospitals to fast food franchises and video rental out lets output is more difficult to measure How do you assign a value to the increased output and produc tivity from an innovation such as 24 hour teller machines Boskin asks Many economists however be lieve a complex economy is only partly to blame for the slump in data reliability In their view the bigger culprit was the Reagan ad ministration Budget cuts forced staff reductions at the statistics agencies and cut into the research needed to keep sampling tech niques current with a changing economy The unreliability of the data often is magnified when it comes to tracking economic activity in specific areas of the country in part because the government does not provide the money to gather large enough samples Paul Getman head of Regional inancial Associates a private economic consulting firm in Bala Cynwyd Pa agrees complaining that the government produces few statistics on regional economic activity on a timely basis make a lot of sense to talk about national trends in housing real estate markets con sumer spending and employment because regional growth patterns can be very he said Even the national statistics can mislead because of the huge revi sions Getman said become very leery about using these numbers but they are all you have so you grasp at them and hope the government make a fool of you in the next 30 he said The Bush administration has sought money to strengthen the system of reporting economic sta tistics but Congress turned down its request for $20 million in addi tional funds last year citing bud get restraints caused by the Gramm Rudman deficit reduction law The administration managed to salvage part of its rescue pro gram by reshuffling available funds This year it came back with an even more ambitious request for $50 million to overhaul 25 sta tistical areas TOMORROW Sluggish Econ omy: Blame It On Credit British chain makes bid for Kay Jewelers LONDON (AP) lar gest jewelry chain Ratners Group PLC yesterday announced a friendly $328 million offer for Kay Jewelers Inc that would make it the second largest jewelry retailer in the United States Kay a 494 store retail network based in Alexandria Va said its board of directors endorsed the offer and would recommend that shareholders accept it The board controls about a third of shares Ratners said it eventually wants to operate 1500 US stores repre senting 10 percent of the frag mented American market The ad dition of stores will increase the current number of US outlets to 967 Ratners said The largest jewelry retailer in the United States today is Zales with 1938 stores owned by Cana Peoples Jewellers Ltd earnings have suffered re cently because of lower consumer spending on luxury goods Last year Kay managed only a $196000 after tax profit on sales of $421 million Ratners said the Kay stores mostly on the East and West Coasts and in Texas would fit in well with Sterling Inc a US jew elry retailer that Ratners acquired in 1987 for $203 million business is concentrated in the Midwest Ratners said it was offering stock worth $17 a share for 124 million shares The bid places the value at $328 mil lion including the cost of assum ing Kay debt Ratners said Briefs Affordable homes WASHINGTON (AP) Rising incomes and falling mortgage rates and prices boosted the typ ical American ability to buy an existing single family home in May a real estate trade group said yesterday The National Association of Realtors said its housing affor dability index was 1056 in May up from 1043 the previous month That means a family earning the national median income of $34142 had 1056 percent of the income needed to qualify for conventional financing covering 80 percent of the median priced home costing $94800 bills down WASHINGTON (AP) Inter est rates on short term Treasury securities fell in auc tion The Treasury Department sold $88 billion in three month bills at an average discount rate of 773 percent down from 778 percent last week Another $88 billion in six month bills were sold at an average discount rate of 760 percent down from 767 percent last week In a separate report the ed eral Reserve said that the average yield for one year Trea sury bills the most popular index for making changes in ad justable rate mortgages fell to 813 percent last week down from 814 percent the previous week Providence PROVIDENCE RI (AP) A decision by RH Macy Co to open a department store in a proposed downtown mall proves that the death knell has not yet rung for the city Provi dence Mayor Joseph Paolino Jr said Monday The company announced that it would open a store in Provi dence Place a proposed 14 mil lion square foot development scheduled to open in the spring of 1994 Construction off WASHINGTON (AP) The construction industry remained in a slump in May as spending dropped 04 percent for its sec ond straight monthly decline the government said yesterday spending has been weak and probably will remain weak for the next few said David Berson chief econo mist for the ederal National Mortgage Association Govern ment spending on construction also will slow the large budget deficits at all The Commerce Department reported that residential non residential and government construction spending totaled a seasonally adjusted annual rate of $4456 billion after falling 22 percent in April Philips loses EINDHOVEN Netherlands (AP) The Philips electronics multinational largest consumer electronics company yesterday predicted more than $1 billion in losses this year and said it would have to cut its workforce by 10000 jobs New president of Philips In dustries NV Jan Timmer an nounced the projected losses at a stockholders meeting 60 Ste.

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