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Prices Down at 0.2% Annual Rate : 6-Month Retail Figure Best Performance in 3 Decades

July 23, 1986|Associated Press

WASHINGTON — Consumer prices, halfway through 1986, are down at an annual rate of 0.2%, their best performance in more than three decades, the government said today. The good news came despite a 0.5% increase in June.

Last month's increase, the steepest since November, followed a 0.2% May gain.

Yet, due largely to three months of falling prices earlier in the year, inflation at the retail level for all of 1986 is now expected to be 2% or less.

Gasoline, Food Prices Rose

Both gasoline and food prices rose last month, the Labor Department said.

Gasoline prices, on the heels of a 2.5% May gain, picked up even further, rising 3.1% in June. Analysts note, however, that by the end of the month, pump prices had once more turned downward.

Food prices were up a tiny 0.1% after a 0.4% increase in the preceding month.

The year-to-date reading was the best six-month showing since a 0.4% drop in 1955.

Despite the June gasoline price increase, overall energy costs this year have fallen at an annual rate of 40.2%.

Grocery store prices declined at an annual rate of 0.5% through June, while restaurant meals increased 4.1% for the same period.

Food prices overall for the year have risen 1% at an annual rate.

Meanwhile, the Commerce Department reported that orders to U.S. factories for "big ticket" durable goods rose 2.1% in June, the first increase in four months and the biggest advance since December.

Personal Income Up 0.1%

And Americans' personal incomes rose a tiny 0.1% in June while consumer spending rose by a more robust 0.6%, the Commerce Department said.

The slight rise in income followed a sharp 0.3% drop in May. The May decline had originally been reported as a 0.1% slippage, but was revised in today's report.

Both the May and June income figures were affected by reductions in subsidy payments to farmers, Commerce Department analysts said. The monthlong strike by the 155,000-member International Communications Workers of America against AT&T also contributed to the weak June wage showing, the analysts said.

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