U.S. CPI up 4.4 per cent

Press, 23 January 1988, Page 31

U.S. CPI up 4.4 per cent

NZPA-AP Washington Consumer prices in the United States, climbing at their fastest pace in six years, rose 4.4 per cent in 1987, the United States Government said.

At fault were rebounding energy costs, higher prices for services and the plunge in the value of the dollar. Worse yet, last year’s inflation was four times the 1.1 per cent rate posted for 1986. Still, the gain in the Labour Department’s Consumer Price Index was considered moderate by most economists and fell far below the doubledigit inflation rates that ushered in the 1980 s.

One piece of good news: Retail prices ended the year on a modest note, up just 0.1 per cent’ in December, the smallest monthly gain since July, 1986.

The index, based on a hypothetical selection of goods and services, had risen 0.3 per cent in November and 0.4 per cent in October.

While the rate for 1986, the lowest in more than two decades, had been paced by

the collapse in world oil prices, much of the 1987 increase reflected the partial rebound in energy costs.

Those prices rose 8.2 per cent in 1987, regaining a portion of their 19.7 per cent 1986 loss.

In December, energy costs fell 1.1 per cent, including a 2.2 per cent decline for petrol, a 1.5 per cent fall for heating oil and a 0.2 per cent drop for natural gas and electricity. For the year, petrol prices were up 18.6 per cent; heating oil costs gained 12.9 per cent; natural gas and electricity charges were up 0.3 per cent.

Minus the volatile food and energy categories, consumer prices rose 3.5 per cent in 1987. This category was up 0.1 per cent in December. Over all, consumer prices last year showed the highest rate of inflation since 1981, when it was 8.9 per cent. With the exception of last year’s surprisingly low pace, inflation has ranged from 3.8 per cent to 4 per cent since 1981.