Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, July 18, 1990 TAG: 9007180474
SECTION: NATIONAL/INTERNATIONAL PAGE: A/1 EDITION: EVENING
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The unexpectedly steep rise in the Labor Department's Consumer Price Index followed moderate 0.2 percent increases for both April and May.
Through the first six months of the year, consumer prices have been rising at an annual rate of 5.9 percent, well above the 4.6 percent for all of 1989.
The sharp rise in consumer inflation in June was sure to worry At least one economist thinks a recession has already begun. A5 House narrowly rejects balanced-budget amendment. A4 analysts, who had been predicting a more modest rise of 0.3 percent.
In another negative economic report today, the government said that housing construction fell in June for the fifth consecutive month, pushing the level of building activity to its lowest point since the depths of the last recession.
The Commerce Department reported a drop of 2.3 percent in housing starts last month, with new homes and apartments being built at a seasonally adjusted annual rate of 1.18 million units. The June decline followed decreases of 0.9 percent in May, 6.9 percent in April, 12.2 percent in March and 5.1 percent in February.
In the inflation report, grocery store food prices, which had fallen in each of the past two months, rose 1 percent in June as prices went up for all of the major food categories, the Labor Department said.
There was a sharp turnaround in the price of fruits and vegetables, which rose 1.5 percent after falling 2.4 percent in May.
Fresh fruit prices rose 2.2 percent after seasonal adjustment, while fresh vegetables, which had increased 29.2 percent in the first two months of the year and then fallen 23.6 percent in the next three months, advanced 1.4 percent in June, the report said.
Pork prices, up 4.0 percent in June, have risen sharply over the past nine months, climbing at an annual rate of 26.2 percent during the period. Poultry prices were up 1.3 percent while dairy prices, after dropping the past three months, rose 0.2 percent in June.
Food overall was up 0.7 percent.
Gasoline prices, which generally increase during the driving season of the summer months, jumped 2.5 percent last month after falling 1.6 percent in May.
Energy costs overall were up 0.6 percent. The price of natural gas shot up 2.7 percent, but fuel oil dropped 4.2 percent and electricity fell 1.6 percent.
Prices for items outside the volatile food and energy sectors jumped 0.4 percent in June. Analysts consider this so-called "core" rate a better indicator of underlying inflation pressures in the economy.
New car prices edged down 0.2 percent, the fifth straight decline in the face of sluggish sales.
Clothing costs, which jumped sharply earlier in the year when a warm February got spring sales off at an early start, fell 0.1 percent last month.
by CNB