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

DATE: WEDNESDAY, April 18, 1990                   TAG: 9004180064
SECTION: BUSINESS                    PAGE: B5   EDITION: METRO 
SOURCE: The Baltimore Sun
DATELINE: WASHINGTON                                LENGTH: Medium

HOUSING COSTS, PRICES UP 0.5

The Consumer Price Index rose 0.5 percent in March, far more than forecast, as a result of higher clothing and housing costs, the Department of Labor reported Tuesday.

Also, housing prices nationally jumped by 0.5 percent last month, compared with 0.2 percent in February. The rise stemmed from a 1 percent increase in homeowners' costs, which fell 0.1 percent in February.

These prices, which are difficult to predict, are based by the government on what it would cost to rent an equivalent home.

Over the first three months, consumer prices rose at an annual rate of 8.5 percent, the largest increase since the spring of 1982.

But much of the quarterly rise stemmed from the huge increase in fuel prices after last December's severe weather. The March increase followed a matching 0.5 percent climb in February and a 1.1 percent rise in January.

Economists said that despite March's unexpected increase, consumer prices nationally were likely to go up this year around 4.5 percent, about the same as in 1989, even though the economy has slowed.

"Inflation is a problem and it is not getting any better, but it is not getting worse," said Cynthia Latta, an economist at DRI-McGraw Hill.

The closely watched core inflation rate, which excludes volatile energy and food prices, rose 0.7 percent last month, the most since December, because of the steep climb in apparel and housing prices.

Government analysts said the rise in housing prices last month was caused by a widespread turnover of rental homes in the Northeast.

Clothing prices in the national index went up 1.6 percent after a 3.3 percent climb in February. Energy prices fell by 0.8 percent last month, mainly because of a drop of 1.4 percent in gasoline prices and a drop of 3.4 percent in home heating oil prices.

The changes left the Consumer Price Index at 128.7 last month before seasonal adjustment. That means that a hypothetical selection of goods and services that cost $100 in the 1982-1984 base period would have cost $128.70 last month, compared with $122.50 a year ago.

by CNB