Energy Costs Push Price Index Up

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Energy Costs Push Price Index Up

March PPI Figures Exceed Expectations Retail Sales Still Soaring

WASHINGTON AP (CBS) The government reports that March wholesale prices rose a full percent, led by a sharp increase in energy costs.

The increase in the Producer Price Index was larger than economists were expecting.

The jolt came from a huge 5.8 percent gain in energy prices, the sharpest rise since a 7.5 percent increase posted in October 1990.

Excluding volatile food and energy costs, the core PPI was up a tame 0.1 of one percent.

In February, wholesale prices also surged 1 percent, the largest gain in nearly 10 years, while the core rate rose an expected 0.3 percent.

The government will report on price pressures at the retail level when it releases its Consumer Price Index on Friday. Many analysts are estimating a March rise of 0.5 percent.

The Labor Department follows with a report on prices at the retail level Friday morning. Analysts look for a gain of one-half of one percent.

In another report, the government says retail sales rose a modest 0.4 percent in March because of a slowdown in car and truck sales. Excluding the auto sector, sales were up a strong 1.4 percent.

The Federal Reserve has raised interest rates five times since June 30 to slow the speeding economy and to keep inflation from escalating. Given the outlook for strong continuing growth, many analysts expect the Fed will boost rates again on May 16.

http://cbsnews.cbs.com/now/section/0,1636,201-412,00.shtml

-- Martin Thompson (mthom1927@aol.com), April 13, 2000


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