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cigarette prices gained 0.5 percent
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The producer price index for finished goods rose by a larger-than-expected 0.5% last month, . . .
Tobacco prices declined 0.1%. [This graph only]
In 1991, OSHA put out a request for information, followed in 1994 with a proposed rule to govern the IAQ in workplaces within the United States. The proposal was highly political and contentious from the start because it focused primarily on cigarette smoke. . . In its most recent action on this contentious topic, OSHA withdrew its IAQ proposal and terminated the rulemaking proceedings last year.
OSHA justified this decision based on state and local laws, as well as private-sector action on second-hand smoke. Between 1994 and 2001, many states, local governments, and private employers took steps to regulate smoking in public areas, and in workplaces. OSHA found that withdrawal of the proposal would allow it to devote its limited resources to other projects.
Interestingly, anti-smoking groups appear now to support OSHA's withdrawal of the proposal. For example, the American Lung Association stated that since 1994 there has been a 50 percent increase in smoke-free workplaces. In another telling sign, ASH has dismissed its lawsuit against OSHA.
However, OSHA is likely to revisit the IAQ aspect of this debate soon. In addition to tobacco smoke, the proposed rule would have required employers to prepare and implement IAQ compliance plans.
Officials from Nassau, Suffolk, New York City and Westchester met in Mineola yesterday to seek consensus on their varying proposals to prohibit smoking in workplaces, including bars and restaurants.
The meeting, billed as a Clean Indoor Air Summit, was organized by lawmakers from Nassau, who with other legislators are advocating uniform smoking restrictions throughout the downstate region.
"I would like to see us come up with a bill that we could all pass," Thomas Abinanti, who chairs the Westchester County board of legislators' health committee, told his colleagues.
Debate quickly arose about how the bills should be crafted, whether they should cover workplaces exclusively, or specifically define establishments and areas the proposals would affect. No decisions were reached yesterday, but the group of about 10 legislators and other officials agreed to meet again at an unscheduled date. . .
The summit drew reaction from the Empire State Restaurant and Tavern Association. The group's president, Bill Leudemann, said during a news conference in Farmingville - held at the same time the summit was being held - that such smoking restrictions would cripple businesses.
The Producer Price Index, which measures inflation pressures before they reach store shelves, crept up a seasonally adjusted 0.1 percent in May, an improvement over a still-moderate 0.3 percent increase in April, the Labor Department reported Thursday. . .
Cigarette prices, which have been rising as companies increase costs to cover legal expenses, jumped 5.6 percent, the largest gain since January.
On Sept. 28, the Agriculture Department reported rising prices for lettuce, chicken, milk and tobacco more than offset cheaper eggs, hogs, potatoes and grapes to boost overall farm prices 1 percent in September, the first increase since May. [This graph only]
The core rate of the producer price index, which excludes energy and food, rose 0.1 percent last month, the same as in July. The cost of cigarettes climbed, and without the increase in tobacco prices, the core rate would have been unchanged, the Labor Department said. . .
Cigarette prices rose 2.6 percent in August, the largest increase since a 6.3 percent gain in February. Philip Morris Cos., the world's largest tobacco company, raised cigarette prices to distributors by about 3 percent to pay for legal settlement costs.
Excluding the volatile energy and food sectors, the ``core'' Producer Price Index rose 0.3 percent in February. The modest increase was due to a 5.6 percent increase in the price of tobacco products, which reversed a 0.2 percent decline in January.
Further excluding tobacco from the ``core'' Producer Price Index yields an increase of only 0.1 percent for February. [This graph only]
Outside the volatile energy and food categories, the "core" rate of inflation, having fallen 0.2 percent in January, rose 0.3 percent last month. . . The government said the increase in the core inflation rate mostly stemmed from a hefty 6.3 percent rise in cigarette prices, the biggest gain in five months. economists said. Excluding cigarettes, the core would have shown no change. [This graph only]
The producer price index was held down by a 4.9 percent drop in wholesale cigarette prices. Data were collected before mid-month price increases of 13 cents a pack by Philip Morris Cos. and R.J. Reynolds Holdings Inc., the two largest U.S. cigarette makers, a Labor Department spokeswoman said.
Because of different survey methods, those increases could be reflected in the consumer price index for January, which the department issues tomorrow. Today's report also did not pick up an increase in the federal tax on cigarettes.
Wholesale prices were unchanged in January as a sharp decline in cigarette prices offset rising costs for gasoline, heating oil and other energy products, the government said Thursday. . . Cigarette prices fell by 4.9 percent in January, the largest decline since August 1993. However, if the decline in cigarette prices were not included, wholesale prices would have risen 0.2 percent, the government said. That would have been in line with many analysts' expectations.
Prices received by U.S. factories, farmers, and other producers probably increased in January because tobacco companies began charging more for cigarettes, analysts said in advance of a report due out today.
Other prices probably showed little change. . . ``The big story in the report is expected to be the boost associated with the hike in tobacco prices,'' said analysts at Standard & Poor's MMS in Belmont, California. . . The Labor Department is scheduled to release the inflation report at 8:30 a.m., Washington time.
Cohen noted that even with no change last month, the core PPI was up 1.8 percent since November 1998. But he added, "Almost all of that increase is the result of the 38.7 percent jump in tobacco prices. The core PPI excluding tobacco is up just 0.1 percent year-on-year."
"If the Surgeon General's warnings were not enough to discourage smoking, perhaps another round of double-digit increases will do the trick," said Lehman Brothers economist Joe Abate.
Given the 3.0% weight of tobacco in the overall PPI, "We suspect this latest hike will add between 0.3% and 0.4% to the aggregate index and slightly more to the core this month," Abate continued.
But due to the "temporary nature of some of this month's distortions, we think the Fed will focus on the smoke-free core index.
A recent increase in US wholesale cigarette prices could boost the core producer price index for September, if history is any guide. At the end of August, tobacco companies announced the second biggest wholesale cigarette price hike in history.