Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, August 14, 1993 TAG: 9308140063
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Food, housing, energy and clothing costs all were unchanged, helping to hold the increase in the Labor Department's Consumer Price Index to just 0.1 percent, the government said Friday.
For the three months ended in July, inflation was running at a 0.8 percent annual rate, the best three-month showing since March-May 1986, when oil prices were plummeting.
The report strengthened economists' belief that a resurgence in inflation earlier this year was an aberration and not the start of a new trend.
"Inflation looks very tame and it should stay tame," said economist Donald Ratajczak of Georgia State University.
The index was helped by falling energy prices, down at a 4.5 percent annual rate over the past three months because of weak world demand. But the feeble U.S. economy also has contributed. Companies trying to raise prices find customers willing to defer purchases or go elsewhere.
Prices excluding the volatile food and energy categories rose just 0.1 percent in July for the second consecutive month. For the year so far, this so-called core rate of inflation, which most analysts consider a better barometer of underlying inflationary pressures than the overall index, rose at a 3.3 percent annual rate, the same as the increase for all of 1992.
The report offered these details:
Gasoline and fuel oil both fell 0.5 percent, but the price of natural gas and electricity rose.
Beef costs fell 0.1 percent and poultry 0.4 percent. Analysts said rising grain prices as a result of the flooding in the Midwest has caused farmers to slaughter animals early, pushing meat prices down.
Fresh-vegetable prices dropped 6.8 percent despite a 15.7 percent jump in lettuce, the worst since March. Tomato prices fell 32.1 percent, the biggest drop in 14 months. Fruit prices rose 4.2 percent.
Airline tickets rose 2.8 percent in July and are up 19.7 percent from a year ago.
Used-car prices increased 0.8 percent and are up 9.1 percent from a year ago.
Medical-care costs, a perennial source of inflation, rose a relatively mild 0.4 percent for the second consecutive month. They're up 6 percent for the year.
The various changes left the Consumer Price Index in July at 144.4, compared with 140.5 a year ago. That means a market basket of goods and services costing $100 in the 1982-84 base period would have cost $144.40 in July, up from $140.50 a year ago.
by CNB