Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, January 12, 1995 TAG: 9501130029
SECTION: BUSINESS PAGE: B7 EDITION: METRO
SOURCE: ASSOCIATED PRESS
DATELINE: WASHINGTON LENGTH: Medium
Analysts said it will be tough to extend the string, but the nation could come close as higher interest rates slow the economy.
The Labor Department said Wednesday its Consumer Price Index climbed 2.7 percent last year, matching 1993's performance. And the year ended much as it began, with a mere 0.2 percent rise in the CPI in December.
``We believe that inflation pressures will remain subdued, but that 1994's performance would be hard to repeat,'' said economist Bruce Steinberg of Merrill Lynch & Co. in New York City. ``There is still no real evidence of wage acceleration.''
The consumer gauge rose 2.9 percent in 1992 and 3.1 percent in 1991.
The stock market posted a modest gain after the inflation report was announced, but later stock prices turned lower.
The moderate increases in prices last year were practically across the board. Core inflation - which excludes volatile energy and food components - turned in its best showing in nearly three decades.
The core rate rose 2.6 percent last year, compared with 3.2 percent in 1993. It was the best mark since a 1.5 percent rise in 1965.
Food, energy, housing and entertainment costs all rose less than 3 percent in 1994, and clothing prices actually dropped by 1.6 percent. The last time apparel prices slipped that much, Harry Truman was in the White House.
Medical-care costs continued to be restrained, climbing 4.9 percent for their best showing since a 3.3 percent increase in 1972. But analysts said the trend may be reversed unless the government reforms the health care system.
Coffee prices ballooned 55.4 percent last year. But beef, pork and poultry declined, and restaurant meals were up just 1.9 percent.
With higher interest rates, car financing costs shot up 23 percent in 1994.
by CNB