Newspaper article THE JOURNAL RECORD

Economic Reports Suggest Expansion `Solidly in Place'

Newspaper article THE JOURNAL RECORD

Economic Reports Suggest Expansion `Solidly in Place'

Article excerpt

WASHINGTON (AP) _ Wholesale prices remained under control in January, the government said Friday in one of three economic reports suggesting continued gradual economic improvement.

The other reports showed that business sales jumped sharply in December and mortgage rates dropped to a 20-year low this week.

"The expansion is solidly in place," said economist Cynthia Latta of DRI-McGraw Hill, a Lexington, Mass., forecasting service. "It's just going to remain quite moderate,"

"We're moving in the right direction," agreed Ron Schriebman, vice president of the National Association of Wholesaler-Distributors. "We just need to pedal faster and create some more jobs."

The Labor Department said its Producer Price Index edged up 0.2 percent in January following a 0.1 percent advance a month earlier and 0.1 percent declines in October and November.

But the report showed that much of the increase was in energy products and automobiles. Food prices were down. At an annual rate, wholesale inflation was running at 2 percent, just slightly more than the 1.6 percent in 1992.

At the same time, the Commerce Department said business sales shot up 1.9 percent in December, outpacing the 0.4 percent buildup in inventories, including a 1.7 percent jump in retail stockpiles.

Analysts were unable to explain the surge in the retail backlog, which occurred at the same stores that were boasting an 0.8 percent increase in sales during the strongest holiday shopping season in four years.

Still, the overall inventories-to-sales ratio fell to 1.46, the lowest level in at least 10 years. That means that it would take 1.46 months to exhaust backlogs at the December sales pace.

Slim inventories often mean increased production and more jobs as businesses try to meet increased demand as the economy picks up.

In good news for home buyers, the Federal Home Loan Mortgage Corp. said fixed-rate, 30-year mortgages averaged 7.75 percent this week. That was the lowest since rates averaged 7.73 percent during the week ended June 15, 1973.

Analysts have attributed recently falling rates to rising housing activity. The latest reports show new home sales rising 6. …

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