Stable Consumer Prices Indicate Fed May Delay Further Rate Hikes

Some recent economic reports, including retail sales, home sales, factory orders and unemployment, suggest the economy is slowing a bit.

In a third report, businesses boosted their inventories by 0.4 percent in April, but saw their sales decline by 0.6 percent, the Commerce Department said.

Economists have offered mixed opinions on whether the Fed will push up interest rates for a seventh time when it meets later this month. But a growing number of analysts, citing Wednesday's CPI report along with data indicating a cooling in certain areas of the economy, believe the odds are greater that the Fed will stay on the sidelines.

Electronic Signature Legislation Advances
Agreement by U.S. House and Senate conferees on electronic signature legislation is "a historic step for e-commerce and the future of the American economy," the U.S. Chamber of Commerce said. S. 761, the Electronic Signatures in Global and National Commerce Act, on which the conferees reached agreement on June 9, promotes the use of electronic signatures and provides a consistent and predictable national framework of rules governing the use of electronic signatures. It preempts state law that is inconsistent with the Uniform Electronic Transactions Act (UETA), and provides that electronic records and notices produced in the execution of a digital contract will not be denied legal effect solely because they are electronic in nature. In addition, it ensures that a company will be able to rely on an electronic contract and that another party will not be able to escape contractual obligations simply because the contract was entered into over the Internet or any other computer network. "Approval of this legislation will ensure that American businesses and consumers can take advantage of the digital revolution," said Rick Lane, chamber director of e-commerce and Internet technology. "This legislation will provide a bridge for companies doing business on the Internet until the 50 states agree on the rules for electronic transactions," he added. The conference report now goes back to the House and Senate, with final passage expected shortly. The White House has indicated it will sign the bill.


FEMA Approves Funds to Purchase Flooded Homes
The Federal Emergency Management Administration has approved a $4.2 million effort to buy Nash County homes damaged by flooding from Hurricane Floyd, Cong. Bob Etheridge (D-2nd) and Sen. John Edwards (D-N.C.) said. The money will be used to buy 30 homes destroyed by the flooding last September and convert the land to open space. FEMA will pay 75 percent of the cost, or $3.17 million, while the state will pay 25 percent, or $1.05 million. The federal money comes from an emergency relief package Congress passed last year.

NAM Challenges Labor Relations Board Policy
The National Association of Manufacturers (NAM) on Wednesday urged the U.S. Court of Appeals for the Sixth Circuit to review whether the National Labor Relations Act protects employees who walk off the job if they feel they are being exposed to dangerous working conditions. In a friend-of-the-court brief filed in TNS Inc. v. National Labor Relations Board (NLRB), the NAM argued that there must in fact be "abnormally dangerous conditions" in the workplace before employees may walk out, and that the NLRB should leave this decision to federal, state and local safety and health agencies that monitor workplace conditions. In addition, the court will decide whether employers have the right to hire permanent replacements for employees who walk off. "Because the term `abnormally dangerous conditions' can be interpreted differently, employees may decide to walk off the job site in virtually any situation," said Quentin Riegel, the NAM's deputy general counsel. "Giving employees the power to come and go as they please without a counter-balancing right for employers to hire replacements could be economically disastrous to any company. This is particularly unfair if employees use job safety issues as a pretext to gain leverage during collective bargaining negotiations."


U.S. Chamber Slams Bid to Control Drug Prices
The U.S. Chamber of Commerce told a Senate committee on Wednesday that it strongly opposes any legislation that will impose a government price control on pharmaceuticals sold in the United States. The chamber sent a following letter to the Senate Health, Education, Labor & Pensions Committee that says, in part that “legislation to impose foreign governments' prices on medication sold in the United States, or to permit re-importation of drugs whose prices are controlled by foreign countries, has grave implications for a multitude of consumer products.” The U.S. Chamber, with which NCCBI is affiliated, said it finds particularly onerous any requirement that imposes foreign government pricing on American consumers. “Such proposals ignore completely external factors that affect the distribution and consumption of products in other countries, as well as the effect on the availability of new innovations in those countries,” the chamber said.

Department of Labor Policy on Unpaid Leave Draws Fire
The U.S. Chamber of Commerce on Monday denounced a Department of Labor (DOL) proposal to pay parents taking voluntary leaves of absence out of state unemployment dollars funded by business. "Unlawfully diverting money from the unemployed and giving it to parents will slash holes in an important safety net for workers," said Randel Johnson, chamber vice president of labor and employee benefits. "If the Administration wants to undercut the unemployment insurance fund, there should be a full public debate first." In earlier written comments to the Labor Department, the Chamber noted that the DOL's own estimate for the price tag for new benefits for an estimated six million workers taking voluntary family or medical leave could cost $36 billion every year. States will be forced to look for other funding sources – most likely in the form of increased taxes or reduced benefits for the unemployed – to pay that cost. "The proposal will pit the unemployed against their more fortunate neighbors who have a job, but wish to take a paid leave of absence, in a competition for limited funds," said Johnson. "If this Administration wants to provide paid leave to employees away from their work, it should submit its proposal to the Congress and finance it honestly – not by robbing a fund that has been paid for by employers and set aside for unemployed workers."

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