Growth Rate Slows Down in Consumer Prices, 1993

By Lamb, Eddie | Monthly Labor Review, May 1994 | Go to article overview

Growth Rate Slows Down in Consumer Prices, 1993


Lamb, Eddie, Monthly Labor Review


Although food prices rose slightly above the overall rate of inflation, price declines in petroleum-based energy, tobacco and smoking products, and moderate costs for medical care were among the major causes of low inflation in 1993

The Consumer Price Index for all Urban Consumers (CPI-U) rose 2.7 percent in 1993, its smallest annual rise since a 1.1-percent rise in 1986, and the second lowest rate since 1965.(1) (See chart 1.) During the past 3 years, changes in energy costs have helped to hold down the overall rate of inflation. While prices for energy moved up slightly in 1992, energy prices in both 1991 and 1993 declined. Prices declined for tobacco and smoking products and moderated for medical care, contributing to the general slowing of consumer price increases in 1993. The rates of change for selected categories of expenditures over the past 10 years are shown in table 1.

The economy

The economy generally improved as 1993 progressed. The Nation's gross domestic product (GDP) rose at a faster rate each quarter; the 2.9-percent increase in GDP for 1993 as a whole was its best showing in 5 years. The unemployment rate, which was 7.3 percent in December 1992, fell to 6.4 percent in December 1993. The number of payroll jobs rose by about 2 million in 1993, as measured by the survey of establishments.

While output and employment grew in 1993, there was little evidence of increasing inflationary pressures. Total labor compensation costs paid by U.S. nonfarm business employers (which include wages, salaries, and benefits paid to their employees) increased 2.8 percent in 1993, after advancing 5.2 percent in 1992. Also, productivity was up 1.9 percent over the past year, offsetting part of the rise in compensation. As a result, labor costs per unit of output rose only 0.9 percent from the fourth quarter of 1992 to the fourth quarter of 1993. In 1993, the Producer Price Index moved up only 1.0 percent for intermediate materials, supplies, and components and 1.9 percent for capital equipment. In addition, long-term interest rates remained relatively low, keeping the cost of financing capital equipment purchases moderate.

Energy

During the past 3 years, generally falling prices for energy have helped to hold down the overall rate of inflation. In 1993, energy costs fell 1.4 percent, after increasing 2.0 percent in 1992 and dropping 7.4 percent in 1991. Prior to the 1993 and 1991 decreases, the last time that energy costs declined was in 1986 (by 19.7 percent), when world oil prices collapsed. The 1993 decline in energy costs was attributable to a drop in the prices of petroleum-based energy commodities. Prices for energy commodities declined 5.1 percent in 1993 after moving up 1.2 percent in 1992. Despite the Federal gasoline tax increase of 4.3 cents a gallon in October 1993, gasoline prices dropped 5.9 percent in 1993. Gasoline prices had increased 2.0 percent in 1992 after dropping 16.2 percent in 1991. The decline in gasoline prices in 1993 reflects a drop in the cost of crude oil in world markets, as the Organization of Petroleum Exporting Countries (OPEC) was unsuccessful in enforcing strict production levels.

Food

Prices for food, which rose substantially less than overall inflation in 1991 and 1992, increased 2.9 percent in 1993, slightly above the overall rate of 2.7 percent. Price increases for fruits and vegetables, along with meats, poultry, and fish accounted for more than half of the increase in food prices in 1993.

Grocery store food (food at home). Prices rose 3.5 percent in 1993, after advancing 1.5 percent in 1992. Prices for fruits and vegetables increased 6.6 percent in 1993, following a 2.2-percent rise in 1992. Fresh fruit prices rose 13.0 percent in 1993, reflecting increases in prices for apples and oranges. Fresh vegetable prices moved up 5.3 percent in 1993, reflecting higher prices for potatoes. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Growth Rate Slows Down in Consumer Prices, 1993
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.