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

DATE: WEDNESDAY, May 16, 1990                   TAG: 9005160657
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A/1   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

PRICES INCREASE SLIGHTLY

Falling costs for vegetables, fuel oil and women's clothing helped hold consumer price inflation to 0.2 percent in April, the government said today.

It was the first moderate report after a severe cold snap sent prices spiraling 1.1 percent in January.

"We're correcting from the unusually high prices of the winter," said economist Donald Ratajczak of Georgia State University. " . . . You could argue the worst of inflation is behind us, certainly for this year."

The Labor Department's Consumer Price Index had risen 0.5 percent in both February and March.

For the first four months of the year, inflation was running at a 6.8 percent seasonally adjusted annualrate, up from 4.6 percent for all of 1989.

In a separate report, the Commerce Department said housing starts plummeted 5.8 percent in April to their lowest level since the 1982 recession. It was the third drop in a row.

The Commerce Department said starts of new homes and apartments totaled a seasonally adjusted annual rate of 1.25 million units, the smallest number since 1.17 million units got under way in October 1982 during the last recession.

Starts plunged a revised 11.2 percent in March and 5.1 percent in February. They originally were reported to have been down 9.3 percent in March and 7.1 percent in February.

In April, food and beverage prices fell 0.2 percent, the first decline since July 1987. Non-alcoholic beverages and dairy products were down, while prices rose for cereal and bakery products, beef, pork, sweets and oils.

Fresh vegetable prices, which rose 29.2 percent in the first two months of the year, fell 15.5 percent last month, bringing the decline for April and March to 19.8 percent.

Energy prices dropped 0.4 percent after declining the two previous months. Gasoline prices, with the start of the warm weather driving season, climbed 0.3 percent and electricity costs were up 0.2 percent. However, fuel oil fell 0.6 percent, the third consecutive decline, while natural gas dropped 3.0 percent.

Excluding the volatile food and energy sectors, prices rose a moderate 0.2 percent after rising a worrisome 0.7 percent in March. Economists say this "core" number is often a better indicator of underlying inflationary pressures in the economy.

by CNB