Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, June 16, 1990 TAG: 9006160084
SECTION: BUSINESS PAGE: A5 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
In other economic news, the Commerce Department said the U.S. trade deficit shrank to $6.94 billion in April, the second lowest level in the last six years.
And, the Federal Reserve said industrial production rebounded an unexpectedly strong 0.6 percent last month after holding steady in April.
The April and May moderation in the Labor Department's Consumer Price Index curbed inflation for the first five months of the year to a seasonally adjusted annual rate of 5.8 percent.
That's up significantly from the 4.6 percent rate for all of last year, but down sharply from the worrisome 8.5 percent rate in the first quarter.
"Inflation remains low and under control," said White House spokesman Marlin Fitzwater.
The better news on inflation was expected by most economists, who said prices are recovering from weather-related increases for food, energy and clothing. Prices for fuel oil and vegetables shot up in January and February in reaction to an unusually severe freeze around Christmas.
Prices excluding the volatile food and energy sectors, often taken as a better barometer of underlying inflation than the overall calculation of prices, rose a moderate 0.3 percent after increasing 0.2 percent a month earlier.
The various changes put the index for all consumer prices at 129.2 in May. That means a hypothetical selection of goods and services costing $100 in the 1982-84 base period would have cost $129.20 last month, up from $123.80 a year ago.
The recent mild inflation meant that Americans' average weekly earnings, after adjusting for inflation, increased 0.3 percent in May. Still, for the last 12 months, earnings fell 0.1 percent. Average weekly earnings in May, before adjusting for inflation, were $344.31, up from $330.86 a year earlier.
Both the 17 percent improvement in the trade gap and the moderation of inflation were taken by analysts as a sign of a weak domestic economy, which translates into lower demand for imports and lower prices for goods in general.
The department offered these other details of May consumer prices:
Fruit and vegetable costs fell 2.4 percent, their third substantial drop in a row. Vegetable prices soared 29.2 percent in the first two months of the year before falling 23.6 percent in the next three months. Dairy costs fell for the third consecutive month while prices were up for sweets, fats and oils and beverages.
Fuel oil costs declined 1.4 percent; natural gas, 2.7 percent. Electricity charges rose 1 percent. Gasoline prices rose modestly, but less than usual for the start of the warm weather driving season. Thus, after seasonal adjustment, gasoline prices were reported down 1.6 percent.
Clothing costs fell 0.3 percent. Prices for men's clothing rose 0.4 percent, but the cost of women's and children's clothing fell 1 percent and 2.2 percent respectively.
New car prices edged down 0.2 percent, their fourth consecutive decline in the face of sluggish sales.
The price of medical care jumped 0.8 percent in May for the fourth consecutive month, pushing those costs 9 percent higher than a year ago.
by CNB