Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, December 11, 1993                   TAG: 9312110070
SECTION: BUSINESS                    PAGE: A-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

THANK OIL PRICES FOR THIS GOOD NEWS

Energy prices fell 1.3 percent last month, the biggest decline since March 1991. That helped offset a 0.4 percent rise in food costs and a 0.3 percent increase in all other goods and services.

The energy declines were produced by a drop in crude oil prices from nearly $19 for a 42-gallon barrel in mid-October to just over $14.50 a barrel this month and should restrain inflation to near zero for the next few months, analysts said.

For the first 11 months of this year, consumer prices have risen at a 2.8 percent annual rate, down a notch from the 2.9 percent rate for all of last year.

"The bottom line is . . . you're basically looking at 3 percent inflation. That's where we've been for the last two years, and that's probably where we'll be for another year," said economist Donald Ratajczak of Georgia State University.

"This good news on inflation is also good news for consumer buying power," said economist Sung Won Sohn of Northwest Corp. in Minneapolis. "Every dollar decrease in the price of crude oil puts $7 billion to $8 billion in consumers' pockets."

In a separate report, the Labor Department said Americans' inflation-adjusted average weekly earnings have climbed for two consecutive months, up 0.3 percent in November and 0.7 percent in October.

In November, gasoline prices fell 1.8 percent, the biggest decline in six months, after jumping 4.5 percent in October because of an increase in federal excise taxes. Fuel oil declined 0.6 percent and electricity 0.8 percent. Natural gas was down 1.7 percent, the largest decline since April 1990.

The index for meat, fish, poultry and eggs increased 0.5 percent, a reflection of higher feed prices after the summer's floods in the Midwest. Vegetable prices jumped 5.3 percent, but fruit costs fell 0.5 percent, led by an 11 percent drop in oranges, the steepest in two years.

The price of new cars was flat last month after a 0.4 percent increase in October. Airline tickets jumped 4.1 percent and have been advancing at a 15 percent annual rate so far this year.

Inflation in medical care, a perennial problem, is milder this year. Medical prices rose 0.2 percent in November. They've risen at a 5.5 percent annual rate so far this year, compared with 6.6 percent for all of last year.