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

DATE: WEDNESDAY, April 13, 1994                   TAG: 9404130105
SECTION: BUSINESS                    PAGE: B-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

STEADY WHOLESALE PRICES EASE INFLATION JITTERS

Wholesale price inflation was in check in March, easing worries a day before a much-anticipated report on consumer prices. The government said steady energy costs helped offset a rise in food prices.

Wholesale prices rose 0.2 percent last month, and for the first quarter of 1994 they were up 3.9 percent at an annual rate, the Labor Department said Tuesday. For all of last year, they were up only 0.2 percent.

Even though some commodity prices rose - with storms and icy weather driving fruit and vegetable prices higher - the overall picture is tranquil, economists said.

``I'm trying to worry. But I can't find much to worry about,'' said Ron Schreibman of the National Association of Wholesaler Distributors. ``Inflation is the rhinoceros in the room that everyone fears but no one can locate.''

Bruce Steinberg of Merrill Lynch & Co. said inflation will continue to be tame as long as labor costs stay low.

The Producer Price Index had jumped 0.5 percent in February, the largest increase in 10 months, because of surging heating costs. March's increase matched the 0.2 percent advance in January.

The index measures inflation pressures before they reach the consumer. The Labor Department is due to announce the Consumer Price Index for March today, with most analysts predicting a modest increase.

Energy prices, which soared 2.8 percent in February as Americans turned up their thermostats to ward off winter's chill, were level in March.

Gasoline prices declined 1.8 percent, and heating oil was down 0.7 percent. But gas for home heating increased 1.9 percent, breaking the previous record of 1.5 percent set in both June 1993 and October 1992.

Food prices, down 0.4 percent in February, shot up 0.5 percent last month as the cost of some vegetables and fruits soared.

Excluding volatile food and energy prices, prices rose the same amount as the overall index in March - 0.2 percent - following a 0.1 rise the previous month.

Robert Barr, an economist with the U.S. Chamber of Commerce, said the wholesale price report should ``lessen pressure on the Federal Reserve to raise short-term interest rates.''

by CNB