The Economic Data Global Express (e-EDGE)

v.6 n.20       Released May 20, 2002
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

U.S. TRADE POLICIES INVOKE STRONG FOREIGN REACTION

     At last week's meeting of the Organization for Economic Cooperation and Development (OECD) in Paris, the United States came under severe criticism for its recent "protectionist" policies.  This took the form of a joint statement by the heads of three international institutions--the IMF (Horst Kohler), the World Bank (James Wolfensohn), and the World Trade Organization (Mike Moore).  Their common concern is that U.S. imposition of tariffs on steel imports and enactment of larger subsidies on American farm products will induce other countries to escalate their own protectionist policies in self defense.  This could strike a blow to trade liberalization efforts and have negative  impacts on the trade liberalization efforts of the WTO.
     The European Union has already retaliated with steel tariffs of its own and Japan has also threatened to follow suit.  Australia, Canada, and Brazil--big global players on the   agricultural exports stage--have already criticized U.S. farm subsidies.  It should not be a surprise to see the European Union respond in like manner, driven by France which has a large farm export sector.
     It is difficult under any circumstances to justify trade protection policies.  However, it should also be acknowledged that the U.S. has been at a disadvantage relative to many countries and in many product markets with regard to competitiveness.  In the near-term, the farm sector in California, Texas, and several Midwestern states will benefit from bigger government payouts.  Also, U.S. steelmakers will enjoy some advantage from lessened foreign competition in some of their market segments.
     In a perfect world (which we are not likely to ever see), it would be better all across the board if we worked towards getting our trading partners to remove or lower their trade barriers instead of raising ours to get even.  (Ken Ackbarali)
PR: http://www.census.gov/indicator/www/ustrade.html
 

INDUSTRIAL PRODUCTION RISES AGAIN IN APRIL

     U.S. industrial production rose by 0.4% in April following increases of 0.4% and 0.3% in March and February.  U.S. manufacturing output now is moving upward after falling throughout 2001.  Over half of the manufacturing sectors covered in the report increased output last month.  However, production of motor vehicles & parts and high-tech products were the real stars, rising by 3.1% and 1.0% respectively.  Industrial production excluding these two sectors showed no change.
     Despite four consecutive plus months this year, total industrial output was still 2.0% below the April 2001 pace.  However, the motor vehicles & parts sector was the leader here as well.  Last month's output was 8.6% higher than April 2001.  The high tech manufacturing sector also improved, but only to a minus 0.2% decline over the year, with computers & office equipment and semiconductors & other electronic components ahead by 7.2% and 5.9% respectively while communications equipment was still down by 20.8%.  Excluding high tech and motor vehicles, industrial production was down by 3.0% over the year, with business equipment (mostly industrial equipment and commercial aerospace) still 12.2% behind April 2001.  (Nancy D. Sidhu)
PR: http://www.federalreserve.gov/releases/G17/Current/
 

RETAIL SALES SOAR IN APRIL

     U.S. retail sales grew by 1.2% in April, much more than expected, following tepid increases of 0.1% in March and 0.5% and February.  Big gainers for the month were sales of building materials & garden equipment (which rose by 2.7% over the month) sales of gasoline (up by 2.0% due mostly to higher prices), automotive sales (up by 1.9%), and sales of general merchandise through both department and large discount stores (up by 1.2%).  Sales of furniture stores declined by 1.4%.
     Newly revised data shows that total retail and restaurant sales have increased by 4.0% over the past 12 months.  Sales of motor vehicles and parts were up by 3.5% (despite the dipsy-doodle caused by zero-percent financing in the fourth quarter).  Retail sectors showing the biggest improvement over the year were health & personal care stores (up by 9.6%), electronics & appliance stores (up by 8.5%), and sporting goods, hobby, book, & music stores (up by 7.1%).  Sales of general merchandise stores also rose by 8.5% over the year, but this figure hides the marked disparity between department stores and "other general merchandise" stores, which is where Wal-Mart, Costco (and Kohl's, we think) are counted.  Data available for March shows sales of the former up by 5.6% over March 2001 while the discount-superstore sector registered a whopping increase of 21.7%.  (Nancy D. Sidhu)
PR: http://www.census.gov/svsd/www/retail.html
 

CONSUMER PRICES POSTED STRONG GAINS IN APRIL

     The U.S. Consumer Price Index (CPI) posted a 0.5% gain in April, following a 0.3% increase in March.  The 0.5% month-to-month increase is the largest since September.  The main culprit was the 4.5% jump in energy costs, aided slightly by a 0.5% increase in medical care costs.  Food prices increased by just 0.1%, the lowest increase so far this year.  Excluding food and energy costs, the core CPI rose by 0.3%, which was within the post-9/11 range (+0.1% to +0.4%).  Gasoline prices rose by 10.1% in April, following a 8.0% increase in March.  For the past 12 months, the CPI rose by 1.6% and the core CPI by 2.5%, well within the Federal Reserve's "comfort zone."  Energy costs were 8.2% below the year-ago level.
     Locally, the greater Los Angeles metro area CPI rose by 0.61% last month, following a slightly smaller increase of 0.56% in March.  The overall CPI was 3.2% above the year-ago level.  The core CPI rose by 0.4% in April and was 3.4% above the year-ago level.  Gasoline prices rose by 6.2% in April, following a 14.5% jump in March.  Nonetheless gas prices were still 6.0% below the year-ago level.  Shelter costs rose by 0.5% last month and were 6.4% higher than a year ago.  Medical care costs rose by 1.5% last month and were 7.6% higher than a year ago.  The core CPI rose by 0.4% last month and was 3.4% higher than a year ago.
     Up north in the Bay Area, the overall CPI rose by 0.9% over the between February and April and was 2.1% above the year-ago level.  Gasoline prices rose by 13.1% between March and April but were 13.6% below the year-ago level.  The core CPI was 0.3% higher than two months ago and 2.9% above the year-ago level.
     Looking forward, the easing in Middle East tensions will help stabilize energy prices.  However, weather problems in the Midwest will likely drive up some agricultural produce prices.  For you smokers, beware: states desperate for revenue may again turn their eyes on tobacco products.  (George Huang)
US PR: http://www.bls.gov/news.release/cpi.nr0.htm
LA PR: http://www.bls.gov/ro9/ro9cpila.htm
Bay Area PR: http://www.bls.gov/ro9/cpisanf.htm
LA CPI data: http://www.e-edge.org/special/cpi-la.htm
 

APRIL PORT TRAFFIC STRONG

     The April container counts are in, and both San Pedro Bay ports had healthy results.  The number of loaded import containers was up by 12.5% over the year at Long Beach and by 22.4% at Los Angeles.  The total number of loaded import containers handled at the two ports during April was ahead 17.6% to 485,926.  The number of loaded export containers increased by 14.7% at Long Beach and by 3.5% at Los Angeles.  The total number of export containers moved during April was up by 8.7% to 179,014.  The total number of containers handled during April was ahead by 14.1% to 894,299.
     The big question is how much of the growth is due to a strengthening economy, and how much reflects nervousness over the West Coast labor negotiations.  We will have to wait until the summer for the answer.  (Jack Kyser)
 

CENSUS 2000 DEMOGRAPHIC PROFILES RELEASED

     The Census Bureau released the demographic profiles for state, county and city/community-level geographic units.  Due to the large volume of data, we are unable to discuss it in great detail here.  We have, however, pulled out a few interesting factoids about L.A. County for you to ponder:
-- Around 69.9% of residents held a high school degree in 2000, nearly the same as the 70.0% mark in 1990.  Yet 24.9% of residents held a college degree or higher, up from 22.3% in 1990.
-- Contrary to popular belief, a larger portion of the adult population (age 15+) was married (48.8%) in 2000 than in 1990 (47.8%).  The divorced population accounted for 8.5% of the adult population in 2000, compared to 8.7% in 1990.
-- The foreign-born population rose from 32.7% of the total population in 1990 to 36.2% in 2000.  The majority of new immigrants came from Latin America (62.1%), followed by Asia (29.6%).
-- Residents speaking only English declined between 1990 (54.6% of the population) and 2000 (45.9%).  In 2000, 28.9% of the population reported that they speak English less than "very well."  This has serious implications for education, public service delivery, and workforce preparedness.
-- The percentage of child-rearing families with both parents working declined from 53.0% in 1990 to 48.7% in 2000.
-- Despite significant investments in public transit and commuting alternatives, the number of drive-alone commuters increased from 70.1% to 70.4%, and the average commute time rose from 26.5 minutes to 29.4 minutes.
-- The proportion of people working in the manufacturing sector declined from 20.5% in 1990 to 14.8% in 2000.  In absolute numbers, it's 861,337 in 1990 and 586,627 in 2000, a decline of 274,710 or 32%.
-- Poverty seems to be rising.  In 1989, 11.6% of all families had incomes under the Federal poverty level; by 1999, it was 14.4%.  Among female-headed households, the poverty rate was 26.5% in 1989 and 28.5% in 1999.  Among non-married individuals, the poverty rate was 15.1% in 1989 and 17.9% in 1999.  Most troubling are the poverty rates in families with very young children (less than 5-years-old)--24.1% for all families and 47.0% for female-headed households in 1999.
-- The housing stock in LA County is aging.  Back in 1990, only 27.3% of housing units were 40 years old or more; by 2000, that figure jumped to 47.4%.  Back in 1990, 16.5% of all housing units were less than 10 years old; by 2000, it was only 6.9%.  LA County built far fewer housing units during the 1990s than in the 1980s.
-- The cost of housing as a percentage of income is rising.  Back in 1989, 30.6% of homeowners spent more than 30% of their income on housing; by 1999, that share jumped to 34.5%.  Back in 1989, 35.1% of residents spent less than 15% of their income on housing; by 1999, that share was only 27.3%.  At the same time, room density rose as more people were in a household.
-- Renters who spent more than 30% of their income on housing declined from 47.0% of total renters in 1989 to 43.8% in 1999.  Perhaps they decided to buy rather than rent. (George Huang)
Cal. page: http://www.census.gov/census2000/states/ca.html (includes 1990 data for California, LA County, and City of LA)
State/County profiles (Census 2000)--if the system is slow, try again tomorrow:
California State - http://www.e-edge.org/special/Census2000_California.pdf
Los Angeles County - http://www.e-edge.org/special/Census2000_Los_Angeles_County.pdf
Orange County - http://www.e-edge.org/special/Census2000_Orange_County.pdf
Riverside County - http://www.e-edge.org/special/Census2000_Riverside_County.pdf
San Bernardino County - http://www.e-edge.org/special/Census2000_San_Bernardino_County.pdf
Ventura County - http://www.e-edge.org/special/Census2000_Ventura_County.pdf
San Diego County - http://www.e-edge.org/special/Census2000_San_Diego_County.pdf
City of Los Angeles - http://www.e-edge.org/special/Census2000_Los_Angeles_City.pdf
 

QUICK STATS:

* BLS: US Consumer Price Index for 4/02: +0.5% (3/02: +0.3%)
* BLS: LA Area Consumer Price Index for 4/02: +0.6% (3/02: +0.6%)
* Census: US retail sales for 4/02: +1.2% (3/02: +0.1%)
* Census: US housing starts for 4/02: -5.4% to 1.555 million annual units (3/02: -8.1% to 1.644mil.a.u.)
* Census: US business sales for 3/02: +0.3% (2/02: -0.8%)
* Census: US business inventories for 3/02: -0.3% (2/02: -0.2%)
* Census: US exports for 3/02: +0.6% (2/02: +0.6%)
* Census: US imports for 3/02: +0.3% (2/02: +3.7%)
* Census: US trade deficit for 3/02: US$31.6 billion (2/02: $31.8bil.)
* Conference Board: US Index of Leading Economic Indicators for 4/02: -0.4% (3/02: +0.1%)
* Federal Reserve: US industrial production for 4/02: +0.4% (3/02: +0.4%)
* Federal Reserve: US industrial capacity utilization rate for 4/02: 75.5% (3/02: 75.3%)
* Univ. of Michigan: US Consumer Sentiment Survey for 5/02: 96 (4/02: 93)

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