Newspaper article THE JOURNAL RECORD

Fruit Costs Soar, but Inflation Remains in Check

Newspaper article THE JOURNAL RECORD

Fruit Costs Soar, but Inflation Remains in Check

Article excerpt

WASHINGTON (AP) _ Fruit costs shot up in August by the largest percentage in 20 years, but the weak economy held overall producerice inflation to a barely perceptible 0.1 percent.

The tiny, seasonally adjusted increase in the Labor Department's Producer Price Index, released Friday, matched the gain in July and, according to economists, was a symptom of weak demand resulting from the near standstill in economic growth.

"For now at least there is little or no inflation," said economist Norman Robertson of Mellon Bank in Pittsburgh. "This is the one positive aspect of having a period of very slow economic growth."

The index measures prices paid by wholesalers to producers such as farms and factories. Although it tracks only the cost of goods, not services, its performance usually foreshadows consumer price movements.

A separate report from the American Bankers Association showed that low interest rates helped consumers catch up on paste loans in the Aprilne quarter. The delinquency rate was 2.60 percent, down from a 2-year high of 2.75 percent three months earlier.

Average rates on 30-year mortgages dropped this week to a 19-year low of 7.84 percent, according to the Federal Home Loan Mortgage Corp. It was the 20th decline in 25 weeks.

In August, declines in the costs of gasoline and fuel oil, tobacco and children's clothing helped offset a 16.9 percent increase in fruit costs, the largest since July 1972, and a 30.2 percent jump in vegetable prices.

Lettuce prices tripled and strawberry prices soared by 70 percent.

Labor Department analysts said alternating hot and cold spells in California's Salinas Valley hurt the lettuce, broccoli, cauliflower and strawberry crops in particular, while floods washed out fields in New York and New Jersey.

Overall, food prices advanced 0.7 percent, the steepest in six months. Costs of chicken, beef and eggs also rose. Prices fell for fish, turkey and cooking oils.

Energy prices edged down 0.1 percent, the second decline after a sharp 2.3 percent jump in June. Gasoline prices fell 1.7 percent and fuel oil costs dropped 4.4 percent. However, natural gas prices rose 1. …

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