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Inflation, Where Is Thy Sting?

May 13, 1999|Bloomberg News

The threat of inflation has become a virtual nonissue for most Americans as prices for goods ranging from clothes to cars have largely remained in check.

Additional confirmation of this phenomenon should come today when the Labor Department reports the producer price index for April and again Friday when it reports the consumer price index. The PPI probably increased by 0.5% and the CPI 0.4%, according to a Bloomberg News survey. Analysts say the increases stem from rising crude oil prices.

Yet food prices were tame and the core rate of the price indexes barely moved, reflecting lower costs for autos, apparel and industrial products, analysts said.

In the months ahead, "the core rate is likely to remain relatively low--and it's the core rate that matters" to the Federal Reserve, said Scott Brown, an economist at Raymond James & Associates in St. Petersburg, Fla.

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