Inflation Eases a Bit In April; Lower Food Prices Hold Increase to 0.2%
After a sharp burst of inflation in the first three months of the year, much of it the result of the impact of bad weather on the cost of food and fuel, consumers got a bit of break last month when prices they pay rose only 0.2 percent, the Labor Department said yesterday.</br></br>Grocery store prices fell 0.7 percent, the first decline in more than two years, as dairy product and fruit and vegetable prices tumbled. Earlier in the year, fruit and vegetable prices had soared after December freezes had severely damaged crops in the South.</br></br>Few economists, however, expect such good price news to be repeated, in part because labor costs paid by private businesses are going up at roughly a 5 percent annual rate. "Wage increases are likely to sustain inflation for the rest of 1990," predicted economist Joel Popkin, an inflation expert who heads a Washington consulting firm. "It is hard to find a break in the inflation clouds."</br></br>Popkin expects consumer prices to be up 5.3 percent during 1990, compared with a 4.6 precent rise last year. A number of other economists believe prices may not go up quite that much this year, but only a handful believe the nation will do as well or better than it did in 1989.</br></br>Nevertheless, even Popkin believes the worst is over for this year. With the consumer price index already 2.3 percent higher than it was in December, prices can rise only 0.3 percent or 0.4 percent a month for the rest of the year if the rate for the entire year is to stay close to 5 percent.