Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, February 20, 1992 TAG: 9202200056
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
PRICES NEARLY STEADY
Consumer prices rose a scant 0.1 percent in January, the government said Wednesday, heralding what may prove to be the least inflationary period in a generation.The Labor Department credited falling energy costs and a drop in food prices for the good showing in its Consumer Price Index. Even excluding the volatile food and energy sectors, prices were up only a moderate 0.3 percent.
"This confirms that inflation pressures are abating," said economist Bruce Steinberg of Merrill Lynch. "I think that will continue to be the picture for all of this year and probably for a chunk of next year as well."
Consumer prices in 1991 rose 3.1 percent, the smallest increase in five years. The January increase, if it held steady for the whole year, would result in an annual rate of inflation of just 0.9 percent.
While economists are not forecasting a performance that good, they do expect inflation to be tame for most of this year.
Inflation generally wanes during periods of economic decline. And it usually does not pick up until recoveries are well under way.
In a separate report, the Labor Department said Americans' inflation-adjusted earnings fell 0.7 percent in January.
It was the worst drop in three months and was caused primarily by a 0.6 percent drop in average weekly hours worked by non-farm production workers.
The small 0.1 percent January rise in prices reflected a drop in energy costs for the first time since last July, by 1.5 percent. It included:
Gasoline costs, down 1.9 percent, leaving pump prices 18.1 percent below their peak level of November 1990 following Saddam Hussein's invasion of Kuwait.
Home heating oil costs, down for a second consecutive month, falling 5.5 percent in January to stand 31.3 percent below their 1990 peak.
Food prices, down 0.4 percent, their first decline since last August. The decline was led by a sharp 7.1 percent fall in the cost of fresh fruits and vegetables and a 12.4 percent decrease in egg prices.
Used-car prices, down 1.1 percent while new-car prices edged up a slight 0.1 percent. However, this increase was more than offset by a 2.4 percent drop in auto financing charges, which because of falling interest rates are now 9.5 percent below where they were a year ago.
Clothing prices, up 0.3 percent.
The biggest price increases, as usual, were recorded for medical care, which rose 0.7 percent in January.
The various changes left the Consumer Price Index, before adjusting for seasonal variations, at 138.1, compared to 134.6 a year ago. That meant a market basket of goods costing $134.60 in January 1990 would have cost $138.10 last month.