the forecast growth rate for the overall CPI is similar.
Some factors that have held down CPI growth over the past two or three years will continue to have an effect. For example, import prices are expected to continue declining in 1999 (in part because of the Asian crisis), and the Bureau of Labor Statistics will institute more changes to the CPI that will reduce its growth by about 0.2 percentage points in 1999 and later years.
However, import price deflation is expected to fade during
1999. In addition, medical care inflation, which grew relatively slowly and dampened overall inflation in the past two years, is forecast to bounce back from its 1997 low of 2.6 percent to more than 4 percent a year during the next 18 months. Corporate profits, which have stagnated since the third quarter of last
year, will remain under pressure through 1999. Rising wages and an expected increase in the growth of employee benefits will push the growth of total compensation higher at the sam
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