Newspaper article THE JOURNAL RECORD

Consumer Prices Rise, Inventories Up

Newspaper article THE JOURNAL RECORD

Consumer Prices Rise, Inventories Up

Article excerpt

WASHINGTON (Bloomberg) -- U.S. consumer prices rose in April at the fastest pace in six months, suggesting inflation may accelerate from the 30-year lows reached earlier this year.

Led by higher costs for housing and health care, the consumer price index rose 0.2 percent last month after being unchanged in two of the last three months, according to the Labor Department. "The best news on inflation is behind us," said John Williams, chief economist at Bankers Trust in New York.

Separately Thursday, the Commerce Department said inventories of goods at U.S. businesses rose 0.5 percent in March after rising 0.7 percent in February -- either because retailers and other businesses were anticipating further strong demand or because they were stocking up on now-cheaper imports from Asia. Offering support for hopes that demand won't slow, the Labor Department reported the number of people filing new claims for unemployment benefits was little changed last week. Initial jobless claims fell 2,000 to 307,000 in the week ended May 9, as the four- week average for initial claims held below 315,000 for the 14th straight week. Still, Federal Reserve officials have shown their patience with the U.S. economy's strong growth and low inflation, keeping the overnight bank lending rate unchanged at 5.50 percent for more than a year. Only one of the 36 banks and securities dealers that deal directly with the Fed's trading desk -- Donaldson, Lufkin & Jenrette Securities -- expects the Fed to raise interest rates when it meets Tuesday. The absence of a significant pickup in inflation and signs Asian economies are headed for another round of turbulence will keep Fed Chairman Alan Greenspan and his central bank colleagues from raising the overnight bank rate, participants in a Bloomberg News survey said. …

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