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

DATE: FRIDAY, July 13, 1990                   TAG: 9007130774
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A/1   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

PRICES STABLE; SALES JUMP

Declining food and energy prices helped hold wholesale price inflation to a modest 0.2 percent in June, despite a worrisome jump in the cost of other items, the government said today.

The rise in the Labor Department's Producer Price Index for finished goods one stop short of the retail level followed a rise in May of 0.3 percent.

It brought wholesale inflation for the first half of 1990 to an annual rate of 3.7 percent, compared with 4.8 percent for all of 1989.

The number was about what economists anticipated. However, prices for items outside the volatile food and energy sectors jumped 0.6 percent in June, the steepest increase in a year and about double the expected rise.

Analysts consider this so-called "core" rate a better indicator of underlying inflation pressures in the economy. However, the jump follows a string of five moderate rises of 0.3 percent or 0.2 percent.

Another report today showed retail sales, bolstered by a big jump in department store sales, shot up 0.5 percent in June, posting the first increase in five months.

The Commerce Department said sales rose to a seasonally adjusted $147.82 billion last month, up $784 million from the May sales level. The June increase came after a string of three consecutive declines, something that had not happened since 1981, during the last recession.

Wholesale prices rose for tobacco, 3.2 percent; passenger cars, 2.3 percent; women's clothing, 0.5 percent; furniture, 0.5 percent; jewelry, 0.9 percent; newspapers, 0.5 percent; over-the-counter drugs, 0.8 percent; and household flatware, 2.3 percent.

Energy prices, which skyrocketed 13.7 percent in January because of a severe cold snap, have declined every month since. They were down 0.9 percent in June after dropping 1 percent in May. Fuel oil fell 10.5 percent and gasoline was down 1.3 percent. Natural gas costs rose 0.4 percent.

by CNB