U.S. inflation goes steadily upwards

Press, 29 August 1979, Page 8

U.S. inflation goes steadily upwards

NZPA Washington Americans are being put through the inflation wringer and there seems little the Administration can do to check the price spiral.

Rising costs continue to wreck family budgets, hurt people on fixed incomes, cut workers’ purchasing power, and contribute to a weak dollar.

Prices rose another 1 per cent in July, lifting inflation to an annual rate of almost 13 per cent.

If consumer prices continue the same dizzying rise for the rest of the year, the 1978 inflation rate will be the worst since immediately after World War 11.

The figures are making nonsense of the Administration’s predictions earlier this year of what the inflation rate would be. Government officials were far off target with forecasts of an 8 per cent rise and the latest bout of price rises makes it doubtful that the Administration can meet its goal of holding inflation for all of 1979 to no more than 10.6 per cent.

The President’s voluntary wage and prices guidelines programme is in ruins and there is nothing to take its place. Stiff increases in the price of foreign oil earlier in the year contributed significantly to July’s consumer price rises. Energy costs soared 4.2 per cent during the month, pushing up the cost of petrol, transport, and electricity. The price boosts announced by oil producers in June have not yet been reflected at retail level so consumers can expect to be hit again soon. The only bright spot for consumers last month was a slowdown in the upward rush of food prices. The increase was a mere 0.1 per cent, down from June’s 0.2 per cent.

Janet Norwood, chief of the Labour Department’s bureau that reports on inflation, said of the latest consumer price increase: “it’s almost monotonous.” She added that she didn’t find any evidence to-indicate the steady pace of price rises will abate.