[Federal Register Volume 63, Number 209 (Thursday, October 29, 1998)]
[Notices]
[Pages 58069-58070]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29001]



[[Page 58069]]

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DEPARTMENT OF LABOR

Bureau of Labor Statistics


Proposed Collection; Comment Request

ACTION: Notice.

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SUMMARY: The Department of Labor, as part of its continuing effort to 
reduce paperwork and respondent burden, conducts a pre-clearance 
consultation program to provide the general public and Federal agencies 
an opportunity to comment on proposed and/or continuing collections of 
information in accordance with the Paperwork Reduction Act of 1995 
(PRA95) (44 U.S.C. 3506(c)(2)(A)). This program helps to ensure that 
requested data can be provided in the desired format, reporting burden 
(time and financial resources) is minimized, collection instruments are 
clearly understood, and the impact of collection requirements on 
respondents can be properly assessed. Currently, the Bureau of Labor 
Statistics (BLS) is soliciting comments concerning the proposed 
revision of the currently approved ``Producer Price Index Survey.'' A 
copy of the proposed information collection request (ICR) can be 
obtained by contacting the individual listed below in the address 
section of this notice.

DATES: Written comments must be submitted to the office listed in the 
address section below on or before December 28, 1998. The Bureau of 
Labor Statistics is particularly interested in comments which:
     Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submissions of responses.

ADDRESSES: Send comments to Karin G. Kurz, BLS Clearance Officer, 
Division of Management Systems, Bureau of Labor Statistics, Room 3255, 
2 Massachusetts Avenue, N.E., Washington, DC 20212. Ms. Kurz can be 
reached on 202-606-7628 (this is not a toll free number.)

SUPPLEMENTARY INFORMATION:

I. Background

    The Producer Price Index (PPI), one of the Nation's leading 
economic indicators, is used as a measure of price movements, as an 
indicator of inflationary trends, for inventory valuation, and as a 
measure of purchasing power of the dollar at the primary-market level. 
It also is used for market and economic research and as a basic for 
escalation in long-term contracts and purchase agreements.
    PPI data provide a description of the magnitude and composition of 
price change within the economy, and serve a wide range of governmental 
needs. These monthly indexes are closely followed and are viewed as 
sensitive indicators of the economic environment. Price data are vital 
in helping both the President and Congress set fiscal spending targets. 
Producer prices are monitored by the Federal Reserve Board Open Market 
Committee to help decide monetary policy. Federal policy-makers at the 
Department of Treasury and the Council of Economic Advisors use these 
statistics to help form and evaluate monetary and fiscal measurers, and 
to help interpret the general business environment. Furthermore, 
dollar-denominated measures of economic performance, such as the Gross 
Domestic Product, require accurate price data in order to convert 
nominal to constant-dollar values. Inflation-free national income 
accounting figures are vital to fiscal and monetary policy-makers when 
setting objectives and targets. In addition, it is common to find one 
or more PPIs, alone or in combination with other measures, used to 
escalate the diverted price of goods for government purchases.
    In addition to governmental uses, PPI data are used by the private 
sector. Private industry uses PPI data for contact escalation. For one 
method of tax-related Last-In-First-Out (LIFO) inventory accounting, 
the Internal Revenue Service recommends that firms use PPI data for 
making calculations. Private businesses make extensive use of 
industrial-price data for planning and operating. Price trends are used 
to assess market conditions. Firms commonly compare the prices they pay 
for material inputs and the prices they receive for products that they 
make and sell with changes in similar PPIs.
    Economic researchers and forecasters also use the PPI. Price 
indexes are widely used to probe and measure the interaction of market 
forces. Some examples of research topics that require extensive price 
data include: The identification of varying price elasticities and the 
degree of cost pass-through in the economy, the identification of 
potential lead and lag structures among price changes, and the 
identification of prices which exert major impacts throughout market 
structures. In the end, both policy and business planning are affected 
by the completeness of price trend descriptions.

II. Current actions

    A description of recent and projected improvements meant to improve 
data completeness, increase efficiency, and reduce overall respondent 
burden to the maximum degree possible follows.

A. Disaggregation

    Recent modifications made to disaggregation (i.e., item selection 
procedures) help to better define a publication structure that: (1) Is 
publishable in its entirety, (2) meets user needs, (3) is continuous, 
and (4) permits meaningful classification of current production. In 
order to obtain and maintain publishability of an entire structure, 
data now are collected using a method where price quotation selection 
is spread across predetermined product categories that correspond to 
the publication cells for a Standard Industrial Classification (SIC). 
The design of the revised disaggregation method nearly guarantees that 
the PPI will include enough price quotations to populate more lightly 
weighted cells. More heavily weighted (and populated) cells will 
receive slightly fewer price quotations than would have been received 
under the previous method. As a result, indexes constituting the PPI's 
publication objectives are much more likely to remain published over 
time. (For a complete description, see ``Change in PPI Publication 
Structures for Resampled Industries Introduced in January 1997.'' PPI 
Detailed Report, January 1997.)

B. Sampling

    Recent modifications made to sampling procedures permit the PPI to 
update weights of industry indexes without initiating a new set of 
respondents. This process change is called ``recycling without 
resampling.'' The PPI also has made it operationally feasible to 
augment the sample of price quotations for a single product line within 
an SIC when necessary, rather than having to initiate a new sample of 
respondents. These capabilities are major breakthroughs, since they 
enable the PPI program to reduce both data

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collection expenses and respondent burden, while permitting efficient 
re-allocation of program resources. Volatile, technologically 
sophisticated, and never-before-sampled SICs now may be updated or 
introduced into the PPI in a timelier manner.

C. Publication

    The PPI mission includes a mandate requiring the program to work 
toward publication, wherever possible, of output price indexes for 
every four-digit industry defined by the SIC Manual. Historically, the 
PPI had been a family of indexes focusing on the Mining, Manufacturing, 
Agriculture, and Forestry sectors. This publication mandate has 
resulted in expansion of coverage into non-goods producing sectors of 
the economy. PPI sampling and data collection methodology have 
permitted systematic retrieval of specific service-industry 
classifications, and have resulted in the publication of various four-
digit SIC aggregate indexes, as well as service-line and detailed 
service-category price indexes. The PPI currently publishes about fifty 
industry-based indexes for service-sector activities. Over the 
preceding decade, the PPI has introduced indexes encompassing 
Transportation, Real Estate, Health, Legal, Accounting, and many other 
service-based industries. Industry expansion continues on a regular 
basis, as funding permits. As recently as the July 1998 data release, 
the PPI introduced price indexes for SIC 6331 (Property and Casualty 
Insurance). In addition, the PPI is conducting research and preparing 
to collect data for Wholesale and Retail Trade Establishments, as well 
as Investment Bankers and Stock Brokers.

D. NAICS Classification

    At present, sampling and data collection are conducted according to 
the SIC Manual system of organization. However, the PPI already has 
begun to make modifications that will permit smooth conversion to the 
North American Industrial Classification System (NAICS).

E. Electronic Data Collection

    The PPI is developing electronic data collection procedures that 
will further contribute to reducing respondent burden and increasing 
efficiency. The program has been conducting a pilot project where a 
subset of respondents receives monthly price quotation forms and 
provides responses through fax technology. Response rates are better 
using fax, suggesting that this method of distributing and receiving 
the forms will be successful. Based on these results, the PPI plans to 
offer faxing as an option to approximately 30 percent of respondents in 
the near future.

F. Internet-Based Data Collection

    BLS-wide efforts are being made to test the feasibility of 
permitting respondents to provide data through an Internet web-browser 
connection. While this procedure, if implemented, would result in a 
major data collection enhancement, a large number of security issues 
must be addressed first. Systems and procedures that protect the 
confidentiality of individual respondents' micro-data, as well as the 
integrity of the BLS network as a whole, must be developed and tested.
    Type of Review: Revision of a currently approved collection.
    Agency: Bureau of Labor Statistics.
    Title: Producer Price Index Survey.
    OMB Number: 1220-0008.
    Affected Public: Business and other for-profit.

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                               Total number                      Total annual   Average time per   Total burden
          Form No.            of respondents      Frequency        responses        response           hours
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BLS 1810A, A1, B, C, C1, and           6,342  Once............           6,342  2 Hours.........         12, 684
 E.
BLS 473P....................         105,000  Monthly.........       1,260,000  18 Minutes......         378,000
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    Total annual burden: 390,684 hours.
    Total Burden Cost (capital/startup: $0.
    Total Burden Cost (operating/maintenance): $0.
    Comments submitted in response to this notice will be summarized 
and/or included in the request for Office of Management and Budget 
approval of the information collection request; they also will become a 
matter of public record.

    Signed at Washington, DC, this 23rd day of October 1998.
W. Stuart Rust, Jr.,
Chief, Division of Management Systems, Bureau of Labor Statistics.
[FR Doc. 98-29001 Filed 10-28-98; 8:45 am]
BILLING CODE 4510-24-M