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Inflation Likely to Remain Tame

May 10, 1999|Bloomberg News

As several key inflation-wary reports are released this week, analysts are forecasting that rising energy prices don't threaten to accelerate U.S. inflation because they are being countered by lower prices for other items from clothes to autos. Confirmation should come when the Labor Department reports the producer price index for April on Thursday and the consumer price index on Friday. The PPI probably increased by 0.5% and the CPI 0.4%, analysts predict. Analysts see them rising that much because of the highest crude oil prices in 17 months. Yet food prices were probably tame, and excluding food and energy, the core rate of the price indexes barely moved, reflecting lower costs for autos, apparel and industrial products. In March, the PPI increased 0.2% and the core rate showed no change. The CPI for March increased 0.2%, and the core rate rose 0.1%. Another less-followed inflation report this week will probably show that import prices moved higher in April, paced by oil. The Labor Department's report, coming Wednesday, is expected to show a 0.5% increase in the import price index for April following a 0.1% increase in March.

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