Well, the Fed has lowered interest rates 3 times since last July. But, looking at the data in today's economic news releases, you wouldn't notice that things had changed much.

The Labor Department's Bureau of Labor Statistics reported today that the Consumer Price Index [CPI] for urban consumers rose 0.2% during December. When the highly variable food and energy components were removed, the rise was a mere 0.1%. For all of 1995, the CPI rose by 2.5%. This compares with increases of 2.7% during both 1993 and 1994 and is the smallest annual rise since 1986. December marks the 60th consecutive month with a low, essentially constant, rate of inflation.

Also today, the National Association of Purchasing Management released the results of its January survey of member firms. Last month the widely-watched Purchasing Managers' Index [PMI] dropped from 46 to 44.2, the lowest reading since the 1990-91 recession. And, speaking of recessions, studies comparing the annual average of the PMI with the annual average Gross Domestic Product [GDP] have shown that PMI readings below 44.5 have been associated in the past with negative growth in the GDP. If the January reading was the the average for the year, it would be indicating a decline in the GDP of 0.1%.

More good news on the inflation front: NAPM's Prices Paid Index declined for the twelfth straight month to a reading of 39.4, the lowest level since July 1991. The January value marked the sixth straight month that the Index read less than 50. The last time this happened was in -- you guessed it -- 1991. 38% of the survey respondents reported that they paid lower prices in January than they had to pay in December. The last time that this statistic was this high was in 1949.

On the employment front, the NAPM reported that January was the twelfth consecutive month in which manufacturing employment declined.

In other employment news, The Labor Department's Employment and Training Administration released its report on new claims for state unemployment insurance for the week ending January 27. For that week, the number of claims dropped by 25,000 to 388,000. The average number of claims filed during the past four weeks was 377,750. This was 12.51% higher than the number for a year ago.

In still more employment-related news, the Conference Board reported today that its December survey of help-wanted advertising in 51 major newspapers showed that the number of employment want ads had increased all over the country. The Board's seasonally-adjusted Help-Wanted Advertising Index expanded from 82 to 88 between November and December.

Byline: Lafferty (MF Merlin)