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Prices Up Mild 0.3% in February : Food Costs Lead Way in Wake of Florida Freeze

March 22, 1985|Associated Press

WASHINGTON — The steepest food price rise in six months drove consumer costs up 0.3% last month, the government said today. Analysts blamed the Florida freeze as the main culprit.

Gasoline prices fell 2.5% in February and were 4.7% below the level of a year ago. Analysts said, however, that the three-month trend has turned around and prices at the pump will continue rising in the coming weeks.

Coupled with the 0.2% overall gain in inflation in January, the Labor Department's consumer price index so far this year has risen a moderate 3.3% at an annual rate.

This compares with a 4% rise last year. Analysts expect that inflation will run at the same pace for all of 1985, giving Americans their fourth straight year of moderate inflation.

Clothing Prices Rise

The department noted that clothing prices shot up 0.9% last month as many stores ended the traditional February sales unusually early. It was the steepest rise for any of the major components of the index.

Food costs, paced by a 2.9% gain in fruit and vegetable prices, rose 0.5% in February. The fruit and vegetable gain was more than double January's rise.

Tomato prices soared 18.7%. Apple and banana prices also rose dramatically, as they often were bought instead of citrus fruit.

The department gave further details of February price activity:

--The food price gain was the steepest since August's 0.5% jump. Egg prices were up 3.1% after declining 13.6% in January. Prices also rose for poultry, while declining for fish, beef and veal.

--As for energy prices, home heating oil costs fell 1.5%, while natural gas prices rose a slight 0.2%.

--Housing costs rose 0.4%, their biggest gain since September. Household operating expenses were up 0.6%, with the Feb. 17 increase of 2 cents in first-class mail rates largely responsible.

--Overall transportation costs fell 0.1% despite big gains in new and used car prices. New car prices rose 0.8%; used car prices were up an even steeper 1.9%.

--Medical care costs rose 0.4%.

--Entertainment costs declined 0.2%, reflecting a drop in prices for movie and theater tickets.

In a separate report today, the Commerce Department said orders to U.S. factories for durable goods, held back by a huge drop in demand for military hardware, declined 0.2% in February.

The department said factories received $104.7 billion in new orders, $200 million below the January level. Orders for durable goods--items expected to last at least three years--had risen 3.2% in January after falling 2.2% in December.

Excluding the defense category, orders would have been up a sharp 4.7% in February.

The overall change was held back by a 48.5% drop in military orders. The department said the decline probably represented a correction, because defense orders had been running at an "unusually high" level for the previous three months.

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