From January 1993 to December 1995, an estimated 8.4 million workers were displaced from their jobs, including 3.8 million long-term workers who had held their jobs for at least three years, the bureau said. Displaced workers are defined as people 20 years or older who have lost their jobs because their plant or company closed or moved, their positions or shifts were eliminated or there was insufficient work for them to do.

Of those 8.4 million workers, roughly six million had successfully found new work by February, when the survey was conducted. Some 16% of those workers remained unemployed, however, and 13% had stopped looking for new jobs and left the labor force. By comparison, 67% of workers in the bureau’s last worker-displacement survey, which was conducted in February 1994 and included the 1991 recession, were able to find new work, while 21% were unemployed.

In signs that the labor market has rebounded since then and that the effects of downsizing may have slowed, 618,000 fewer workers lost their jobs from 1993 to 1995 than in the 1994 survey, and displacement among long-term workers fell 15%.

"We’ve created about 10 million new jobs. It’s been a strong, strong labor market recovery," said economist Audrey Freedman, president of Audrey Freedman & Associates in New York.

Since 1993, 44% of displaced workers lost their jobs because of plant closings. Roughly 24% said there was insufficient work, while nearly a third said their jobs were eliminated. Over 56% said they didn’t receive advance notice that they were losing their jobs.

Nearly three out of 10 displaced workers came from the manufacturing sector. But downsizing took its toll among white-collar workers as well, said Joseph E. Stiglitz, chairman of the Council of Economic Advisers.

"White-collar workers represent a much larger share of those displaced. The share of manufacturing, while large, continues to decline," he said.

But it remains easier for laid-off managers and other white-collar workers to find new work. Nearly 80% of managers were in new jobs by February, while only 64% of operators, fabricators and laborers had been rehired. In part that reflects the changing nature of the economy, but analysts have noted that it is easier for white-collar workers to find new jobs because of a greater number of outside contacts and a wider range of skills.

One worrisome trend that surfaced in the survey was that more than half of workers took new jobs that paid them less, including nearly a third who accepted a job that paid them 80% or less of what they previously had been earning. "The steady upward wage movement that was our wonderful future has stalled," Ms. Freedman said.

In a separate report Thursday, the Labor Department said initial claims for state unemployment benefits rose 6,000 last week to 327,000. The four-week moving average, a closely watched barometer of labor-market trends, rose 1,500 to 314,000. The figures are adjusted for seasonal variations.

The Health Insurance Portability and Accountability Act extends new protections to an estimated 25 million Americans in so-called "job lock," a situation in which employees don’t switch jobs for fear of losing coverage due to pre-existing medical conditions.

The legislation includes a phased-in 80% tax deduction for health-insurance premiums for the self-employed by 2006, up from the current 30%. It also allows for the creation of 750,000 medical savings accounts that, much like individual retirement accounts or 401(k) savings plans, would enable individuals to set aside tax-free contributions toward routine medical expenses. Most of the bill’s provisions will take effect July 1, 1997.

The legislation was jointly sponsored by Sens. Nancy Kassebaum (R., Kan.) and Edward Kennedy (D., Mass.) and enjoyed widespread support, passing the Senate unanimously and the House 421-2 earlier this month, and both parties sought to claim credit for it Wednesday.

"Today we declare a victory for millions of Americans and their families," President Clinton said. "No longer will you live in fear of losing your health insurance because of the state of your health."

"The American people should ask why it took President Clinton more than three years to support these common-sense reforms, which he previously threatened to veto," Republican presidential nominee Robert Dole said in a statement.

As the parties quibble over the credit, Democrats have done their utmost to reclaim the spotlight during this week’s convention interlude, using the White House as a backdrop to stage several elaborate ceremonies. For Mr. Clinton, this week’s bill signings for a higher minimum wage, health-insurance and welfare reforms and business tax breaks provide a high-profile way for him to seize attention and credit in the wake of the Republicans’ national convention, and in the buildup to his own party gathering next week in Chicago.

En route to the Democratic convention by train next week, the president will seek to keep the spotlight with daily announcements of new initiatives. He’s also expected to clear new restrictions on tobacco marketing Friday.

In particular, Mr. Clinton will propose a still-evolving initiative to help welfare recipients find work through a combination of tax and wage subsidies for employers who hire them. The aid would be coordinated with local governments, aides say.

In addition, the president is expected to pull one long-pending proposal from the White House shelf to permit homeowners to avoid capital-gains taxes on the sale of a primary residence. Under current law, capital-gains tax relief goes to those age 55 and over. In practice, removing the age limit wouldn’t have a major impact since many younger taxpayers sell a home then use the proceeds to buy a more expensive one, avoiding capital-gains taxes in that way.

The White House zeal to pitch new ideas, if minor ones, reflects the competition with Robert Dole now that the Republican presidential candidate has put forth an ambitious tax-cut program. Mr. Clinton’s political advisers would like bolder strokes, but his economic advisers for now have prevailed in limiting initiatives to ideas that have relatively little if any federal cost.

Teenage drug use has more than doubled since 1992, the Department of Health and Human Services said. Nearly 11% of 12-year-olds to 17-year-olds used drugs on a monthly basis last year, and that number has climbed steadily from a low of 5.3% in 1992.

While teenage drug use has increased, usage by older Americans has declined in the same period, and overall levels of drug use have remained flat, the reports said. An estimated 12.8 million Americans used illegal drugs last year, the same rate as in 1992.

At campaign stops Tuesday, Republican presidential candidate Robert Dole immediately sought to capitalize on the rise in teenage drug use, depicting the increase as the result of a lax Democratic White House.

"This is nothing short of a national tragedy," Mr. Dole told the Veterans of Foreign Wars annual convention in Louisville, Ky. He vowed "to make the drug war priority No. 1 once again" and said he would host a conference of drug-abuse experts at the White House "to find solutions to put us back on the course to absolute victory."

In response, White House press secretary Michael McCurry insisted the drug war remains a "high priority" with the president. Asked if Mr. Clinton bears some responsibility for the increase in drug use, as some Republicans have asserted, Mr. McCurry said drug experts first noted the upward trend in 1991, before Mr. Clinton’s election. "He understands that there’s more that needs to be done, which is what he has consistently been doing in his time here," Mr. McCurry said.

Tuesday’s political back-and-forth was the latest in a series of Republican attacks on the White House for granting security clearances to staffers who had recently tested positive for illegal drugs. Republican leaders leaked summaries of the reports well in advance of their release, attempting to score some last minute points with voters before the start of the Democratic National Convention in Chicago next week.

The move comes after some Republicans suggested an announcement earlier this month that juvenile crime had dropped for the first time in nearly a decade had been timed to steal the spotlight from their convention last week in San Diego.

Aside from the rise in drug use by teenagers, Tuesday’s reports also revealed that marijuana usage increased sharply while cocaine and heroin-usage remained the same. An estimated 9.8 million Americans used marijuana in 1995, comprising 77% of illicit drug users.

Additionally, there were nearly 532,000 drug-related hospital emergency room visits last year, nearly the same rate as in 1994. Cocaine-related cases made up 27% of all hospital visits in 1995, while another 14% were heroin-related. Over half of the visits were made by people who had overdosed, the reports said.

The stable prices at the producer level offer a further sign that inflation is under control, analysts said. Bonds were up sharply on the news Friday, with the Treasury Department’s benchmark 30-year issue closing Friday at 100 23/32, up 23/32 point.

"It just doesn’t get much better than this," with declining inflation and strong real growth, said Chris Varvares, a forecaster at Macroeconomic Advisers L.L.C. in St. Louis. The producer price index, which tracks price fluctuations at the producer level, and the consumer price index, its retail-level counterpart that will be released Tuesday, help economists to measure inflation.

The report gives the Federal Reserve yet another reason not to raise interest rates at its Aug. 20 meeting, after data earlier this month indicated average wages and factory orders have fallen recently. Indeed, there were few hints of out-of-control growth in July wholesale prices. Energy prices, which have declined for three months in a row, fell 0.9%, though they were offset by a 0.2% increase in food prices. Automobile prices also fell 0.9%. Excluding the volatile food and energy components, producer prices rose 0.1%.

Not only were prices for finished goods unchanged, but those of intermediate materials that need further processing — such as flour, yarn and lumber — fell 0.3%, excluding food and energy. Similarly, prices for raw materials — like cotton and coal — fell 1.6%. Those drops indicate there is little inflation in the pipeline, analysts said. "If you’re looking at the crude prices, there doesn’t seem to be much pressure there at all," Bureau of Labor Statistics economist Scott Sager said. All figures were seasonally adjusted.

The index’s rise was its fifth in a row, including a 0.3% gain in April and a 0.2% gain in May. Three consecutive increases usually signal that the economy is expanding.

"The economy is on the move again, but the speed of the expansion is uncertain," said Robert Dederick, chief economist at Northern Trust Co. in Chicago.

The index of leading indicators is intended to predict economic activity six to nine months ahead, but many economists say it more accurately reflects current economic conditions. While it is useful for forecasting whether the economy will grow or contract, the index doesn’t indicate the rate at which changes will occur.

For those reasons, analysts said, Monday’s report offered little to resolve their concern about whether the second quarter’s sizzling economic growth will continue in the second half. Federal Reserve Chairman Alan Greenspan warned last month that the economy may be growing too quickly, leading to speculation that the Fed will raise interest rates at its monetary-policy meeting Aug. 20.

But reports of rising unemployment and declining wages released Friday strongly suggest that growth in the third quarter will be more moderate, analysts said.

June’s decline partially unraveled the huge 4.2% jump in May orders. That gain was just one piece of economic data in the robustly healthy second quarter that caused financial markets to wonder if the economy was in danger of overheating.

But June’s report helped temper that fear a bit. Treasurys ended modestly higher Thursday, with the bellwether 30-year bond rising nearly 3/8 to yield 7.01%.

More than half of the June decline in orders for durable goods, or big-ticket items such as appliances and automobiles expected to last more than three years, came from a plunge in new aircraft bookings. That was partly offset by a 31.6% increase in defense orders. Stripping out the volatile defense and aircraft sectors, total new orders rose 1.3% in June.

Although the manufacturing sector has shown erratic results month-to-month during the second quarter, overall orders have grown faster than they did a year earlier. "The basic trend is that orders are increasing gradually, with bouncing along the way," said economist Richard Rippe of Prudential Securities.

While new orders fell in June, unfilled orders increased for the second month in a row, suggesting that manufacturing activity will continue to be solid as factories work to keep up with demand, analysts said.

Economist James Annable of First National Bank of Chicago said the report indicates that the economy has finally completed corrections for inventory rebuilding, the General Motors Corp. strike that hobbled auto production and brutal winter weather in the first quarter. "We’re getting a regression back to moderate growth," he said.

Analysts are closely watching for signs of a slowdown. In recent days, Federal Reserve Chairman Alan Greenspan has said policy makers will be monitoring even the smallest changes in the economy to gauge whether growth is easing. Moderation of growth would make it less likely that the Fed would raise interest rates at its meeting next month.

But the government’s durable-goods report tends to be "so erratic" that a June decline in orders alone probably won’t do much to convince the Fed of a slowdown, said David Orr, an economist at First Union Corp. in Charlotte, N.C. The Fed chief "says he needs persuasive evidence. This is not persuasive evidence," Mr. Orr said.

Next week’s economic data will be much more important to the Fed. That’s when the government releases its first estimate of second-quarter growth, the July employment report, and the quarterly cost-wage index.

Separately, the Labor Department said Thursday that first-time unemployment claims dropped by a surprising 45,000 to 322,000 last week. Although some of the decline may be due to auto manufacturers beginning production of 1997 models, the data may suggest an improved employment picture, analysts said.

The four-week moving average of jobless claims, considered to be a better barometer of labor-market health, fell by 8,000 to 352,000 claims.

The abortion pill cleared a major hurdle on Friday when an advisory panel recommended that the Food and Drug Administration approve the product. The FDA could approve RU-486, also known as mifepristone, for use in the U.S. by early fall.

Three weeks ago, the same FDA advisory panel ruled that certain combinations of existing birth-control pills could safely and effectively be used as "morning-after pills" to prevent pregnancy when taken within 72 hours after sexual intercourse. Some antiabortion groups argue this process can amount to abortion.

Meanwhile, the combination of methotrexate, a cancer and arthritis drug, and misoprostol, an ulcer drug, also has been found to induce abortion. Richard Hausknecht, an obstetrician at the Mount Sinai School of Medicine in New York, revealed in the New England Journal of Medicine last summer that the combination caused abortions in 171 of 178 patients, with side effects similar to RU-486.

Since then, Dr. Hausknecht says he has been besieged by calls from American doctors interested in the method, although most physicians aren’t using the drug combination until larger clinical trials are completed.

Delivery of these new alternatives will depend largely on doctors because drug companies are reluctant to market abortion-inducing drugs amid fears of product liability and political controversy. Methotrexate, for example, is available from various drug companies, including American Home Products Corp.’s Wyeth-Ayerst Laboratories unit, which also markets birth-control pills. But American Home isn’t going to market the drug for abortions.

An American Home spokeswoman says, "We do not market, promote or research methods for use in early termination of pregnancy," and the company doesn’t plan to do so. As for using birth-control pills as a morning-after remedy, she adds: "We do not now and have no plans to market any birth-control pill formula for postcoital use in the U.S. The risk of litigation is our primary concern."

Nevertheless, doctors are free to begin using the cancer drug and regular birth-control pills for abortions. That is because the FDA regulates only what drugs are allowed on the market and what companies can say about them; doctors are legally allowed to use approved drugs for unapproved purposes.

Dr. Hausknecht of Mount Sinai says a group of doctors eventually plan to submit an application for FDA approval of the use of methotrexate for abortion purposes. Usually, the FDA advisory panel takes requests for new uses from drug companies.

The Population Council, a nonprofit research group in New York, received American patent rights for RU-486 from Roussel Uclaf SA, the French unit of Hoechst AG of Germany that developed RU-486 and markets it in Europe. The group has spent $12 million on clinical trials for the new drug application. It has tapped a new nonprofit organization in Washington, Advances in Health Technology Inc., to coordinate distribution and manufacturing. The group will sell the drug directly to doctors and health organizations and also train them to use it.

Neither group will name the third-party manufacturer that will produce the drug, out of fear that it could face a boycott or violent protests. But both say the company has the capacity to produce an "ample" supply. The panel on Friday recommended that patients receive misoprostol in addition to RU-486; studies show that the two-step process is more effective than taking RU-486 alone.

The new choices could put doctors back in the abortion business after a steady decline. Amid rancorous and sometimes violent protests of antiabortion groups, the number of doctors willing to perform the procedure had dropped to fewer than 2,400 by 1992, down almost 20% from a decade before, according to the Alan Guttmacher Institute, a nonprofit group that favors abortion rights. Federal officials say that 1.3 million abortions were performed in 1993, down from a high of 1.4 million in 1990; abortions are believed to have continued declining since then.

But a recent survey by the Kaiser Family Foundation found that one-third of obstetricians who don’t perform abortions would prescribe mifepristone if it became available. "There is potential for considerable expansion," in the number of abortion providers, says James Trussell, who heads the Office of Population Research at Princeton University.

"American women are slowly getting more options," says Gloria Feldt, president of Planned Parenthood in New York. "It’s about time."

Antiabortion groups counter, however, that all three methods could increase the frequency of an emotionally and physically painful procedure when other measures, such as prevention and adoption, should be pursued. And some critics charge that RU-486 can cause life-threatening bleeding.

Doctors who conducted clinical trials of RU-486 admit that excessive bleeding is a rare complication of the abortion pill, but say that happens in less than 1 in 500 cases. They also note that hundreds of thousands of woman have taken it in France, England and Sweden for years with few major problems.

The Federal Aviation Administration forced the discount airline to cease operations indefinitely June 17. But early this week, about half of ValuJet’s fleet was still parked at airports in Atlanta and Washington, blocking gates and costing ValuJet money. At Atlanta’s Hartsfield International, one out of every eight domestic gates was filled with parked ValuJet planes, increasing congestion even as Atlanta prepares for Olympic-size traffic.

Three more jets were parked at Washington Dulles International. The rest have been sent to maintenance facilities in Lake City, Fla., and Macon, Ga., or to temporary storage at South Carolina’s Greenville-Spartanburg International Airport.

"We are continuing to explore our options," said ValuJet spokesman Gregg Kenyon, adding that other airlines have expressed "considerable" interest in buying or leasing ValuJet planes.

Airport parking for cars may seem costly, but it’s small change compared to parking a jet. ValuJet pays $9,500 a month for each gate at Dulles, says Charles Erhard, the Metropolitan Washington Airports Authority’s manager of finance and administration. ValuJet ended gate leases at three other airports Wednesday.

To cut down on parking bills, the airline always could send its fleet to special airplane parking lots in the Arizona desert. One jet can be stored at a field for as little as $350 a month, says Charles Simmons, vice president for operations at the Evergreen Air Center in Marana, Ariz. Indeed, it would be a homecoming of sorts for some of ValuJet’s planes — the airline kept down its start-up costs by buying older planes that other airlines had placed in long-term desert storage.

But ValuJet said Tuesday it hopes to get the FAA’s blessing to resume flying Aug. 1 with a smaller fleet of four to 15 planes. With over $200 million in cash on hand, ValuJet may be able to take its time deciding whether to sell, lease or store the rest.

Either way, the airports hope ValuJet finds someplace else to park. "We don’t know what their plans are" at Dulles airport, says Jonathan Gaffney, spokesman for the Metropolitan Washington Airports Authority. "We could certainly use those gates."

Since then, he has spent more than $500 on books about Libertarianism. He cleared his summer to work on a 21-chapter book about Christianity and Libertarianism. He joined the party and planned to drive nearly 26 hours to attend its presidential nominating convention that began July 4 in Washington.

"I’ve never met another Libertarian in my life," says Mr. Hobbs. "This convention will be the first time."

Young Mr. Hobbs is exactly the kind of person the "LP," as the political party refers to itself, is looking for. With its membership aging, the party is mounting its first concerted effort to recruit younger members.

For the first time since the LP was founded 25 years ago, the party’s presidential nominating convention is being held in July instead of over Labor Day, in part so college students can attend. The convention will feature a session entitled "Listen Up Generation X" and two days of special workshops on campus-organizing techniques for the first time as well. The party also has launched an innovative effort to use the Internet and talk radio to get its message out.

The campaign of Harry Browne, an investment adviser who is the likely LP presidential nominee, also has relied heavily on the Internet. Early on in his campaign, he set up a web site (http://www.rahul.net/browne/) that features his position papers and a chatty campaign diary. If he gets the nomination Saturday, he plans further efforts specifically aimed at young voters: "We’ll do everything we can to get onto MTV."

The Libertarian Party, founded on a platform of dismantling government functions not specifically authorized in the Constitution, currently has 15,600 dues-paying members and 125,000 registered voters. The party’s platform includes calls for repealing the income tax and ending government interference with gun control, drugs and abortion. The party expects to be on the presidential ballot in all 50 states for the third time and will field candidates in a majority of U.S. House races, which no third party has done since 1920. But while libertarian ideas seem to be increasingly popular, the party itself isn’t a major political force.

Unlike the two major parties, which have long relied upon campus organizations of Young Republicans and Young Democrats as sources for volunteer labor and organizing activities, the Libertarians have had trouble establishing permanent presences on college campuses. "You get a good vibrant group going and then the firecracker graduates," says Rick Tompkins, a former Arizona state party chairman who also is a candidate for the LP presidential nomination.

Libertarians say their emphasis on reducing the size of government debt that will fall to the next generation — and reducing the size of government in general — should appeal to young people. And the best avenue for reaching those people these days is the Internet. "Both the Democrats and Republicans are still caught up in building organizations and hierarchies on campus," LP National Chairman Steve Dasbach says. "The Internet provides a real means of linking college students together without having these hierarchical organizations on campus."

Since college students generally have free Internet access and high-speed connections, the Internet has already emerged as a key organizing tool on campus, students say.

"Through the Internet, I get to meet other young Libertarians," says Ed Hertzog, a 21-year-old political science major at Penn State University. "I’d put the Internet at the top of the list [of organizing tools.] Communication is the key in organizing a party."

"We have a very high percentage of Libertarians on the Internet. Recruiting on the Internet has been very successful for us," says David Fry, a 21-year-old business management major at Bradley University in Peoria, Ill., who was scheduled to attend the convention as a delegate.

That’s exactly how Mr. Hobbs discovered the LP last September while researching presidential candidates on the Internet.

In May, Apple Computer launched a multimillion-dollar marketing tie-in with Tom Cruise’s "Mission: Impossible." It featured Mr. Cruise in its TV and print ads, created a web site for the movie and even cosponsored its premiere.

Apple executives say they are pleased with the public reaction to their "brand-energizing" campaign. But techno-savvy moviegoers are baffled by the short shrift given Apple in the film.

It’s true that Mr. Cruise spends a fair amount of screen time hunched over an Apple PowerBook laptop. Yet neither Apple’s logo nor its familiar Macintosh interface appear on his computer. Mr. Cruise uses a clunky custom interface that requires him to type in commands rather than clicking on an icon. Thus, the Apple connection is lost on most moviegoers.

Worse, during a scene in which Mr. Cruise and his team are planning a break-in at the CIA, their computer expert insists the caper depends on obtaining "Thinking Machines laptops," with nary a mention of Apples. But Thinking Machines Corp. has never made laptops — or anything much smaller than supercomputers.

The mistakes — not to mention the perceived slight to Apple — provoked plenty of buzz on the Internet among Mac fanciers. "I don’t know what Apple was thinking when they agreed to letting this travesty of a movie use their products," griped one. "I think Apple got a raw deal," posted another.

Apple signed up as the movie’s sponsor too late to have any influence over the script. But it hasn’t fared much better since the movie’s release. Not long after announcing the tie-in, Apple had to recall thousands of defective PowerBooks. "The irony of this is that if you were sucked in by the web site and the commercials, you couldn’t even buy [a PowerBook] because there aren’t any in stores," says Geoff Duncan, an editor of the Mac newsletter TidBITS.

Meanwhile, because of design quirks in Apple’s "Mission: Impossible" web site (http://www.missionimpossible.com), some Mac computers have crashed when users visit. "Is an Intel machine required here?" sniped George McClelland of Roanoke, Va., after his Mac went down. "Is this a good ad for Apple?"

The Federal Aviation Administration’s shutdown of ValuJet Airlines — less than six weeks after FAA officials had insisted that the airline was safe — has raised questions about the agency’s ability to ensure the safety of the U.S. airline industry. Those concerns led Tuesday to a major personnel shakeup at the agency, a tightening of inspection rules and a plea by Transportation Secretary Federico Pena for Congress to rewrite the agency’s historic mandate that requires it to promote as well as police the aviation industry.

"There should never be another question about the top priority of the FAA," Mr. Pena said at a news conference called to deflect criticism of the agency. His comments made it seem likely that the fallout from the crash of ValuJet Flight 592 into the Florida Everglades on May 11, killing all 110 people on board, could lead to a radical change in the way the FAA regulates the airline industry.

Mr. Pena and FAA Administrator David Hinson conceded that the agency failed to heed earlier indications of potential safety problems at the upstart, low-fare airline. Mr. Hinson acknowledged that the FAA didn’t adequately gauge ValuJet’s airworthiness, saying, "We bear some responsibilities in this case."

For one thing, Mr. Pena said that the agency didn’t adequately monitor the growing industry trend of having maintenance work done by independent contractors, known as outsourcing. FAA investigations concluded that the practice led to a litany of safety concerns at ValuJet. As a result, Mr. Hinson said the agency would boost its inspections of airlines that use outside contractors to conduct their maintenance operations.

The turmoil at the FAA also led to a high-level personnel shakeup. The agency’s top inspection official, Anthony J. Broderick, long-time FAA associate administrator for regulation and certification, submitted a letter to Mr. Hinson taking early retirement. In his letter, Mr. Broderick said the agency needed to repair its public image and he believed his departure could help accomplish that.

"The events of the past weeks mandate that you make major visible changes to improve the public confidence in the safety of our air transportation system and the quality of FAA oversight of the airlines. My leaving will provide you with the maximum amount of flexibility to make those changes," he wrote.

Mr. Pena’s call to rewrite the FAA’s basic mandate could bring even more changes. Since it was chartered in 1958, the agency, which is part of the Department of Transportation, has had the sometimes contradictory mission of ensuring safety as well as promoting air travel. Over the years, that dual mandate has prompted the FAA to oppose numerous safety recommendations from the National Transportation Safety Board, concluding that the changes would be too costly for airlines and aircraft makers.

Critics say that conflict was illustrated vividly the day after the ValuJet crash when Messrs. Pena and Hinson stood before television cameras and attested to the airline’s safety. Mr. Pena said Tuesday he is urging Congress to change the FAA charter so that it has only one mission: regulating safety.

ValuJet said there was no evidence that maintenance was to blame for the crash. The National Transportation Safety Board suspects that oxygen canisters being carried illegally in the plane’s cargo hold may have caught fire minutes after takeoff from Miami International Airport. But its official report on the cause of the crash won’t be ready for months.

Meanwhile, the FAA appears to have been deeply divided over how tough to be on ValuJet. As late as last Thursday, FAA officials in Atlanta and three key investigators were negotiating with ValuJet chief executive Lewis Jordan to trim the airline’s fleet of aging aircraft so that the carrier could have better control over maintenance. At that point, there was no discussion of a shutdown, according to people involved with the talks.

Over the weekend, however, two officials from the FAA headquarters in Washington flew to Atlanta to review the inspection records. After a series of weekend meetings, the regulatory officials recommended that Mr. Hinson give ValuJet an ultimatum: Shut down voluntarily or be shut down.

At about 1:30 p.m. Monday, Messrs. Hinson and Pena met at the White House with Clinton administration officials, including chief of staff Leon Panetta and senior presidential adviser George Stephanopoulos, who had been sharply critical of their earlier public assurances that ValuJet was safe. A White House official said Clinton political advisers didn’t press the transportation officials to shut down the airline.

But about an hour after that meeting began, FAA officials in Atlanta presented the ultimatum to a stunned Mr. Jordan, according to people familiar with that meeting. ValuJet announced it would temporarily suspend flights but called the FAA’s action "grossly unfair" because it said it had been denied the opportunity to respond to the agency’s concerns.

The chain of events prompted a round of criticism of the FAA on Capitol Hill. Republican Sen. Larry Pressler of South Dakota, chairman of the Senate Commerce Committee, blasted the FAA for its oversight of ValuJet safety, particularly because a string of internal agency documents chronicled problems at the carrier long before the crash.

Jeff Nelligan, a spokesman for the House Transportation and Infrastructure Committee, which oversees the FAA, said it was "absolutely brazen" for Mr. Pena to blame the agency’s problems on its dual mandate. "This is passing the buck," Mr. Nelligan said. "They are scrambling over there and it’s apparent to all."

The FAA admits that its oversight capabilities haven’t kept pace with the explosive growth of new airlines in recent years. Mr. Pena has trumpeted the rise of low-cost carriers, including ValuJet, as a major victory for the Clinton administration and a boon for the flying public. Asked at a briefing about President Clinton’s expressed concern about the quality of the FAA’s safety oversight, White House spokesman Mike McCurry said, "The President wants to make sure we do everything, redouble and recheck everything, that it is absolutely the safest system on Earth."

Republican Sen. Fred Thompson of Tennessee, Democratic Rep. John LaFalce of New York and the husband of Democratic Rep. Nancy Pelosi of California each made at least $5,000 on hot IPOs since last year, sometimes by buying and selling the same day. The wives of two other Democratic congressmen — Lloyd Doggett of Texas and Peter Deutsch of Florida — invested in IPO stocks but still hold them.

All deny receiving special treatment from their brokers, who usually reserve IPO stocks for their best customers or other favored clients. The lawmakers reported the trades on annual financial disclosure statements released last week.

Initial public offerings are as close to a sure thing as the stock market offers for those who get in early on the right deals and sell on the same day because the price often rises sharply as soon as the stock begins trading. Several lawmakers in the past few years have sworn off such trades after news reports disclosed lawmakers" profits, including former Democratic House Speaker Thomas Foley and GOP Sen. Alfonse D’Amato of New York. They ceased trading in IPOs after critics suggested that their stock profits appeared to be, in effect, gifts from people with stakes in pending governmental matters who might want to curry their favor.

A recently released Securities and Exchange Commission report on Sen. D’Amato’s one-day $37,125 profit questioned the motives of his brokerage firm, Stratton Oakmont Inc. of Lake Success, N.Y. Stratton at the time was the subject of a major SEC enforcement action.

Sen. Thompson had just opened his account with his Nashville broker at J.C. Bradford Co., when he took home a one-day profit of $7,700 on an investment of about $15,000 in IPO shares of Cybex Corp., a Huntsville, Ala., electronics maker.

Sen. Thompson’s press secretary, Alexandra Pratt, pointed out that the senator "had his share of gains and losses," including one trade in which he lost $3,000. The Tennessee Republican also authorized his broker, Paul "Buddy" Enoch, to discuss the matter on his behalf.

It was through Mr. Enoch that Sen. Thompson obtained the hot investment. The stock was "way oversubscribed," according to Cybex spokesman Stephen Thornton, meaning that most investors couldn’t buy shares before it went to market. Sen. Thompson didn’t report the profit on his financial disclosure form. When The Wall Street Journal questioned the apparent oversight last Friday, Mr. Thompson filed an amendment.

Mr. Enoch says he invested Mr. Thompson in another successful IPO this spring, Premier Technology. Sen. Thompson flipped 500 shares of that stock for a profit of about $3,300. Mr. Enoch says he gives many of his other clients access to initial public offerings. Sen. Thompson, he adds, happened to have a large sum of ready cash in his account when the two stocks went public.

Typically, hot IPOs go to wealthy investors. And despite his long and successful careers in law and acting, Sen. Thompson has relatively modest means. His federal financial disclosure form indicates that his net worth, excluding his home, is less than $615,000 and could be as low as $200,000. His brokerage account, which Mr. Enoch calls "medium size," appears to be worth considerably less than $100,000.

Mr. Enoch, however, said he spreads his IPO shares around to all of his clients. The senator "wasn’t treated differently than anyone else," he says. Mr. Enoch says Sen. Thompson came to him on someone else’s recommendation, but he doesn’t know whose.

Sen. Thompson has received campaign contributions from J.C. Bradford executives, including Mr. Enoch. In his 1994 campaign, 11 officials of the firm contributed a total of $6,100. Over the last two years, another $15,750 was given by Bradford officials. A Nashville-based lobbyist who counts the firm among his clients, Thomas Ingram, was a consultant to Sen. Thompson’s 1994 campaign.

The financial disclosures of the other members who traded in IPOs suggest fairly active and sophisticated trading. For example, Rep. Pelosi, one of Congress’s wealthier members, reported more trades in new stocks than any other member. All seven were listed in the name of her husband, San Francisco businessman Paul Pelosi. The trades included some of last year’s hottest IPOs, such as the Internet-related companies Netscape Communications Inc. and UUNet Technologies Inc.; both doubled in value within a day. Mr. Pelosi bought and sold between $1,000 and $15,000 worth of each within a day of the offering. He bought like amounts of stock in four other companies — Remedy Corp., Opal Inc., Legato Systems Inc. and Act Networks Inc. — right around the time of their initial offering and then sold within a month or two. He reported buying Vanguard Airlines stock around the time of its initial offering and still owned it at the end of the year.

Most if not all of Mr. Pelosi’s trades appear to have been profitable. Rep. Pelosi couldn’t be reached to comment.

Rep. LaFalce, the top Democrat on the House Small Business Committee, bought $15,000 worth of IPO stock in Healthplan Services Corp., which specializes in providing health-care administrative services to small companies. The company says there were five times as many orders for the stock as there were shares for sale. Rep. LaFalce reported making between $5,000 and $15,000 when he sold it three months later. Through a spokesman, the congressman says he is an active trader who was given access to the IPO through his broker, whom he declined to name.

The wives of Reps. Deutsch and Doggett invested at least $1,000 in Food Court Entertainment Networks Inc., and Schlotzksy’s Inc., respectively. Both say their brokers gave them access to the deals but treated them just as they do other clients.

"We’re hot as fire down here," he drawls. "It’s not the best it’s ever been, but it’s pretty dang close."

Defying predictions, American consumers continue to open their wallets — and fuel economic growth. Economists say businesses let their inventories dwindle early this year and then were surprised by consumers’ resilience. But now, as they rush to restock their shelves, economic growth could pick up in the current quarter — with much of the spending coming from affluent Americans enjoying the dual benefits of rising incomes and gains in mutual-fund investments.

You can see evidence of economic growth in the cars streaming into Mr. Helfman’s dealership from Chrysler Corp.’s Sterling Heights plant, near Detroit. The plant recently added Saturdays to its production schedule "to keep up with demand," says Dick Entenmann, its manager. Even hotter is Chrysler’s minivan plant in nearby Windsor, Ontario, now up to three shifts and turning out 1,450 units a day. "The lights never go out around here," says manager Adrian Vido, though he has to allow half an hour between shifts for workers to get in and out of parking lots.

Chrysler’s growth is leading the industry at the moment; its May sales were up 17% from a year earlier. For the industry as a whole, auto sales by domestic producers rose 7% from May 1995. Chrysler economist Van Bussmann says the industry, long prone to boom-and-bust cycles, will rack up its third year of strong sales this year. "We haven’t had three years of back-to-back steady sales for at least 50 years," he says.

All this activity on Main Street, of course, is making Wall Street nervous. Bond-market experts fear that when the economy gets hot, inflation heats up, too. So, they are watching closely for any hints of excessive strength in the government’s employment report coming out Friday. Strong job growth, they fear, could lead the Federal Reserve to raise interest rates in an effort to head off inflation, and fixed-income securities would suffer.

Right now, there is little evidence of strong growth fueling inflation. Materials costs are stable, and businesses say they have little pricing power. "It is becoming increasingly difficult to pass on higher prices," says Nolan Archibald, chief executive of Black & Decker Corp., the Towson, Md., toolmaker. With foreign competition intense, "you just have to absorb any price increases on the raw-material side."

Wage increases remain modest as well. In 26 states, unemployment is below 5% — a level that in the past has pushed wages higher. Yet even in those states, employers seem to find creative ways of hiring enough workers without raising wages. In Minnesota, with a 3.1% unemployment rate, for example, the Minneapolis bus authority cut its drivers’ minimum age to 19 from 21 to fill jobs. The first to be hired, 19-year-old Kari Kuntz, seems a little out of place among the burly men in the drivers’ lounge of the bus garage. She says most passengers don’t ask about her age, though some inquire about her long, purple-tinted hair.

William J. Hudson, chief executive of AMP Inc., a $5.5 billion maker of electronic components with 40 factories in the U.S., says he isn’t having any trouble filling jobs. He is raising wages by a moderate 3.5% this year, "but we are more than making up for that in higher productivity." Meanwhile, his prices are falling an average of 4% a year, largely because of foreign competition.

The Fed isn’t at all likely to raise interest rates at its July 3 meeting despite the bond market’s fears. In interviews, some Fed officials express concern about a first-quarter uptick in wages, but they note that that rise was offset by lower employee benefits. And they see scant other signs of strain in the economy; they note, for instance, few worrisome shortages of materials. One of Chairman Alan Greenspan’s favorite indicators, lead times for parts and materials deliveries, has been little changed for a few months, giving no hint of the bottlenecks that could force up inflation.

"We are in a strong quarter," a fact that will require the central bank to be especially vigilant for inflationary signs, says Fed Governor Janet Yellen. But she adds, "The underlying trend is for balanced growth" and expects the second half to slow a bit from the current pace.

For President Clinton, the economy could hardly be better; in some ways, it is in its best shape in a generation. Although a flare-up in inflation or surge in interest rates could change things quickly, the economy’s current resilience is helping fuel Mr. Clinton’s popularity in the opinion polls. The so-called misery index — the combination of inflation and unemployment that helped sink President Carter’s bid for re-election — is at its lowest level in decades. Inflation has stayed below 3% for more than three years, and unemployment below 6% for nearly two years. However, wage stagnation remains a serious and confounding problem for people who lack a college education.

What could go wrong? For one thing, the economy’s moderate strength isn’t uniform. California is finally emerging from a long slump, which lingered on well after the national recession lifted in 1991. But unemployment there remains at a painful 7.5%, second only to West Virginia’s. New York and New Jersey, too, are lagging behind in economic growth.

There’s also the possibility that inflation will pop up, forcing the Fed to act later this summer. A single strong quarter isn’t likely to cause policy makers to slam on the brakes; nor is it likely that a small rise in rates would sharply slow the economy. But if there are signs of an inflationary spike, the outlook could change.

And the stock market might drop. Economists think one explanation for the strength of housing and auto sales might be the "wealth effect": Households flush with gains on stocks or mutual funds are more likely to buy big-ticket items. But if those gains in wealth evaporate in a sudden slump in the market, it could affect consumer spending in a way that it never has before, says economist Henry Kaufman. A bigger slice of household assets is in the stock market now than before the 1987 crash; so, a plunge could hit consumer sentiment far harder. "There’s no precedent for this," Mr. Kaufman says.

But for now, it’s steady as she goes. "It’s not too hot, and it’s not too cold," Chrysler’s Mr. Bussmann says.

Mr. Bussmann’s favorite consumer-spending barometer is a measure of real disposable income per household — income after taxes and inflation, divided by the number of households. In March, disposable household income was 1.8% above a year earlier. "It’s been running in that range for a couple of years," he says. "Steady, sustained growth — nothing that would lead to a buying binge," but enough to keep people buying plenty of Chryslers.

The consumer’s strength is evident in government statistics that show overall consumer spending soared in the first quarter to a two-year high. Retailing, after suffering during the winter, is picking up, with high-end merchants doing especially well. At Neiman-Marcus Group Inc., for example, $1,000 suits are flying off the racks, says Kelly Patrick, a spokeswoman. Among even bigger-ticket items, luxury-yacht sales are booming: Kadey Krogen Yachts Inc., a Miami maker of boats that start at $350,000, says business is so good that its production is sold out for a year.

Even the limousine business is rolling along. "Compared to last year, our business is booming," says Ari Kazmi, manager of All City Limousine in Burlingame, Calif. But he says competition is fierce, keeping prices down. The wedding season is just getting under way, he says, and he has been booking more bachelor and bachelorette parties this year.

Consumers are snapping up outdoor products, despite bad weather in much of the country. Black & Decker’s Mr. Archibald reports strong sales for every product category in his outdoor division, led by the Hedge Hog, a cordless hedge trimmer. Cordless lawn mowers, which, at $350 or more, cost far more than conventional models, are roaring, he adds.

In manufacturing, a slow first quarter is giving way to hopes of a stronger year ahead. AMP’s Mr. Hudson says the economy "isn’t exactly ebullient, but it’s not sick." His company, which makes parts for scores of industries ranging from computers to cars, is budgeting for a stronger second half now that inventories, which were too big last year, are down and demand has steadied.

The rise in interest rates over the past three months may slow parts of the economy later this year, of course. But right now, housing sales are still showing unexpected strength. In the latest report, for April, new-home sales shot up 28% from the slow pace a year earlier. But many in the business say the second half will slow, reflecting higher mortgage rates, which now stand at 8.3%.

The slowing trend is clear in northern Montgomery County, Md., outside Washington. Its rolling hills are full of new homes for sale, mostly priced above $250,000. Rob Bolton, a salesman for Virginia-based Ryan Homes Inc., recalls that in some weeks earlier this year he would have one customer in the office and three more waiting to talk to him in the model home nearby. Now, things are starting to slow.

"Sales are pretty steady, but they are way down from February, March and April," he says. "It’s been a pretty successful year so far, but the amount of traffic I see up here is really directly affected by higher interest rates." Indeed, some large builders are beginning to talk about slippage in building contracts and even some outright cancellations.

Moreover, many Americans, in spite of the favorable macroeconomic trends, still feel discouraged by the stagnation of wages that affects many less-educated workers, and by continued corporate layoffs. "In the face of all this seemingly good news, a sense persists that something is fundamentally wrong," Mr. Greenspan said Wednesday at an economic conference on Cape Cod, Mass. "I refer to the pervasiveness of job insecurity in the context of an economic recovery that has been running for more than five years, inflation that has been contained, and a layoff rate that is historically quite low."

The Fed chairman also suggested Wednesday that this insecurity is rooted in a "rare, perhaps once-in-a-century event — a structural technological advance." The rapid changes in technology, he said, have created a world in which ideas and education are now the dominant element in creating economic value. This, in turn, can be threatening to people unready or unwilling to embrace it. "A new world is emerging," he said.

Factory orders fell slightly because reduced demand for aircraft and defense goods offset moderate gains in other sectors, the Commerce Department reported. The April decline followed a revised 1.7% increase in March, previously reported as a 1.5% gain.

Analysts had predicted a greater decline in April after the Commerce Department announced last week that durable-goods orders, such as for major appliances and automobiles, fell 1.9% in April. But orders for nondurable goods rose 2% for the month, offsetting that result.

The downturn in durable-goods orders mostly reflects erratic month-to-month demand for civilian aircraft. Although auto sales rebounded in April following the General Motors Corp. auto-parts strike, overall orders for transportation goods dropped 12.8% after a 14.6% increase in March.

Excluding that sector, new orders for other items rose 1.9% in April. Those gains indicate a slowly rebounding manufacturing sector, said Robert Dederick, chief economist at Northern Trust Co. "The manufacturing sector has been the drag on the economy," he said. "That stage is really behind us."

Factory inventories were unchanged, and unfilled orders fell 0.2%. The completion of several months of inventory correction indicates continued short-term growth, analysts said.

"This picture is very, very consistent with an economy that was depressed by an inventory adjustment and is working its way out of it," said James Annable, the chief economist at First National Bank of Chicago. "But it will continue to be hampered into the second half of the year."

The industrial sector will continue to produce erratic results but is experiencing a general pickup in activity, said Richard D. Rippe, senior vice president and chief economist at Prudential Securities.

"Business is gradually improving," he said. "It’s not a picture of sharp or robust growth."