Inflation Still Tame, Price Report Shows: Rise Was 0.1%
The Labor Department reported yesterday that the consumer price index rose 0.1 percent for the fourth consecutive month in June, as declines in energy and apparel prices largely offset increases in housing, medical care and entertainment prices.</br></br>Over the first half of the year, the CPI rose at a 1.4 percent annual rate, the smallest rise for the first half of a year since 1986 when oil prices collapsed.</br></br>"Trying to find inflation in this economy is like trying to find a flea on a furry dog. Every once in a while he scratches, but it is hard to see the flea,Û said Ken Mayland, chief economist at KeyCorp Inc., a bank holding company in Cleveland.</br></br>Meanwhile, the Federal Reserve said industrial production, the output of the nation's factories, mines and utilities, rose a moderate 0.3 percent last month, an increase analysts said posed no threat of inflation in the prices charged by firms in that part of the economy.</br></br>The news sparked rallies in both the stock and bond markets. The Dow Jones industrials average rose 63.17 points, to close at a record 8038.88. The price of a 30-year U.S. Treasury bond rose $8.75 per $1,000 face value as its yield, which goes down when the price goes up, fell to 6.47 percent from 6.54 percent Tuesday.