Newspaper article THE JOURNAL RECORD

Wholesale Prices Up 0.2 Percent

Newspaper article THE JOURNAL RECORD

Wholesale Prices Up 0.2 Percent

Article excerpt

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WASHINGTON (AP) - A record surge in vegetable costs and increases in other food prices pushed wholesale prices up 0.2 percent in April, the government reported Friday.

Last month's rise in the U.S. Labor Department's Producer Price Index, which measures inflation before it reaches consumers, was the first increase in wholesale prices in five months.

Prices had fallen in each of the previous four months, largely because of tumbling oil prices. But analysts said the recession, which started last July, has also been holding back prices.

In April, there were further declines in gasoline and home heating oil prices, but they were much smaller decreases than earlier months. Food costs rose 0.4 percent, led by a record 34.3 advance for fresh and dried vegetables. It was the largest spike in vegetable costs in the 25 years that the government has tracked such statistics, the Labor Department said.

While the overall producer price index increased 0.2 percent in April, wholesale prices excluding the volatile food and energy components, or the so-called core rate, rose 0.2 percent as well, the same amount as the month before.

The latest two moderate increases in the core rate excluding food and energy were expected to ease earlier concerns about inflation that were spurred by sharp gains in this category in January and February.

April's slight advance in producer prices, coupled with the declines of earlier this year, left wholesale prices falling at an annual rate of 2.9 percent for the first four months of 1991.

Private economists expect further increases in wholesale prices in coming months as energy prices firm up, but they are still expecting this year's overall price increase to be far below last year's 5.6 percent increase.

Much of the steep increase of 1990 was blamed largely on the huge increases in energy prices that followed Iraq's invasion of Kuwait last August. Energy prices shot up at an annual rate of nearly 120 percent from July through September, but have fallen sharply in recent months. …

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