THE DAILY COLLEGIAN
Wages up with economy growth
By Jeannine Averse
ASSOCIATED PRESS WRITER
WASHINGTON, D.C. The U.S. econo
my grew robustly in the first three months of
this year as workers enjoyed the biggest
jump in wages and benefits in 10 years. But
that sparked fresh inflation worries among
economists and investors.
The country's total output of goods and
services, called the gross domestic product,
rose at an annual rate of 5.4 percent during
the January-March quarter, the Commerce
Department said yesterday. Consumer
spending, the locomotive of the speeding
economy, led the way by posting its largest
increase in nearly 17 years.
At the same time, an inflation gauge tied
to the GDP rose sharply, reflecting higher
energy prices. But what really sent shivers
through economists was a spike in workers'
pay and benefits.
They shot up 1.4 percent in the first quar
ter, the biggest advance in 10 years, the
Labor Department said.
Benefits, such as higher health care pre
miums and bonuses, accounted for much of
the gain. For the year ending March 31,
workers' wages and benefits rose 4.3 per-
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cent, the biggest increase in eight years.
That's good for workers, but economists,
including Federal Reserve Chairman Alan
Greenspan, worry that if companies pass on
these rising costs to buyers of their prod
ucts, higher inflation could be triggered.
"Hold on to your hats as Mr. Greenspan's
nightmare is beginning to come true. For a
long time now, the Fed chairman has been
warning ... that the tight labor markets
would ultimately cause labor compensation
to surge. Well, as usual, he was right," said
economist Joel Naroff of Naroff Economic
Advisors. Amid these worries, some econo
mists said the Fed may boost interest rates
by a more aggressive half-point on May 16.
All five of the Fed's rate increases since
June 30 have been by a quarter-point.
"Instead of jabs, the Fed may have to go
with a sharp uppercut," said Oscar Gonza
lez, economist with John Hancock
On Wall Street, stocks initially plunged
after the reports' release. But a technology
stock rally helped blue chips shake off fears
of higher interest rates raised by the reports.
The Dow Jones industrial average had fallen
as much as 197 points earlier in the session
but recovered to end the day with a smaller
loss of 57.40 points to close at 10,888.10. The
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NATIONAL
tech-heavy Nasdaq finished up 143.94 points
at 3,774.03. Bond prices fell as yields on 30-
year Treasurys rose to 5.98 percent from
5.94 percent late Wednesday.
The Fed's rate increases are designed to
raise borrowing costs for big-ticket items
such as homes and cars and in that way cool
off demand and keep inflation from getting
out of hand.
An inflation gauge tied to the GDP that is
closely watched by Greenspan rose at an
annual rate of 3.2 percent in the first quarter,
the largest increase since the third quarter
of 1994, and up from a 2.5 percent rate in the
fourth quarter. The pickup reflected surging
energy prices.
First-quarter economic growth, while
slightly weaker than expected, was still
faster than the rate of 3.5 percent to 4 per
cent that the Fed regards as the pace that
can be sustained without sparking inflation.
In the last three months of 1999, the econ
omy grew at a sizzling 7.3 percent rate, the
strongest showing in nearly 16 years. The
record-breaking economy, in its longest-ever
streak of uninterrupted growth, continues to
be powered by consumer spending, which
accounts for two-thirds of all economic activ
ity.
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Cloned cows'
no discrepancies
■ A new study revealed the
cells of six cloned cows show
none of the premature aging
reported from Dolly the sheep,
the first cloned animal.
By Lauren Neergaard
ASSOCIATED PRESS WRITER
WASHINGTON, D.C. Massachusetts
scientists have cloned six cows that show
none of the worrisome premature aging
reported for Dolly the sheep.
In fact, the cows' cells seem to have a sur
prisingly prolonged youth, a new study
shows.
The finding is important because it could
erase doubts about trying to use cloned
cells to fight diseases, doubts raised when
scientists discovered Dolly's cells appeared
older than she was.
But the cloned cows the oldest turned
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a year old this week, while the others are 7
months old have cells that appear as
young as the cells of newborn calves,
researchers with the biotechnology compa
ny Advanced Cell Technologies report in
Friday's edition of the journal Science.
Unlike Dolly, the cows were cloned from
cells nearing the end of their lifespan. If
even very old cells can have their "aging
clock" essentially rewound, then scientists
might one day be able to clone customized
replacement tissues for patients suffering
diabetes, Parkinson's or other diseases, say
experts on cellular aging.
Does it also mean the cloned cows could
live longer than normal?
Maybe, says Advanced Cell Technologie , '
chief scientist, Dr. Robert Lanza. "There's a
chance these could be the longest-lived
cows on the planet."
But no one will know that for years, cau
tioned Thom Pederson, a cellular biologist
at the University of Massachusetts Medical
School.
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