WASHINGTON — Another drop in energy costs pushed wholesale prices back 0.6% in April for the fourth straight monthly decline, the Labor Department said Friday, but analysts said the economy was poised for renewed inflation as oil prices level out.
Crude petroleum prices rolled back 16.9% last month after declines of 20.3% and 24.8% in February and March, according to a Bureau of Labor Statistics report.
Prices to gasoline dealers were down 10.4% in April after a record 21.9% dive in March. Natural gas prices fell 5.6%, the largest decline in more than nine years.
Excluding energy prices, the cost of finished goods increased 0.2% in April, bureau analysts said.
At the White House, deputy press secretary Edward Djerejian called the wholesale price report "more evidence that inflationary pressures are still firmly held in check."
"The unprecedented assault on inflation now finds the (producer price) index at its lowest level since November, 1983," he said.
"With record-breaking economic news being made with each new month, economic expectations continue to climb," Djerejian said. He noted a Commerce Department report released Friday that shows a surge in housing starts in the first four months of this year unrivaled since the late 1970s.
The April producer price index decline, which followed drops of 0.7%, 1.6% and 1.1% in the first three months of this year, was somewhat smaller than expected.
The modest deflation rate reflected a 0.7% increase in the wholesale price of durable goods and a 0.3% rise in the cost of capital equipment.
Wholesale food and animal feed costs declined 0.8% but the cost of consumer goods overall edged up 0.1%, the report said.
Rollbacks in the cost of fresh fruits, eggs, beef and veal, fish and cooking oils were partly offset by a 20.9% leap in the cost of fresh and dried vegetables.
The index, which is adjusted for seasonal changes, fell back 1.6% in February, the largest decline since the government began keeping the statistic in 1947.
Excluding both food and energy costs, the wholesale price index advanced 0.6% last month, according to bureau analyst Craig Howells. He said the trend presaged a return to an annual inflation rate of 3% to 4% in the latter half of this year.
'Outlook Very Good'
Most economists believe the deflationary effects of the oil price declines have just about played themselves out. The cost-per-barrel of crude oil dived from about $27 in December to around $11 early last month but has since leveled off.
"We have seen most of the last declines in energy prices," said Lawrence Chimerine, president of Chase Econometrics, a forecasting concern. "But the inflation outlook is still very good."
The price of non-durable goods, which include gasoline and foodstuffs, fell 2.7% overall in April.
Alcoholic beverage prices gained 0.1%, while soft drink costs rose 0.8%.
Car Prices Climb
Prices of new cars climbed 1.6% and light trucks gained 1.8%. Economists said the increases were among the first results of the recent slide in the value of the U.S. dollar against other major currencies.
The overall producer price index stood at 286.9 in April, meaning that a market basket of goods that cost $10 in 1967 cost $28.69 last month. This overall figure, unlike others in the report, is not seasonally adjusted.
But not all the economic news on Friday was good.
The Federal Reserve Board reported that U.S. factories, mines and utilities operated at 79.3% of capacity in April, the same level as in March. The operating rate of U.S. industry in the last two months has been at its lowest level since December, 1983, underscoring the weakness in the industrial sector of the economy.