Evidence Was Weak For Market's Plunge, Federal Data Shows: Market Drop Unwarranted, Analysts Sa
Retail sales rose 0.8 percent in August and prices at the wholesale level jumped 0.3 percent, but neither report was enough to support Wall StreetÛªs fears of a return to raging inflation or an economy heating up, economists said yesterday.</br></br>Many analysts said there is little evidence to suggest that the economy will continue on anything but a sluggish track, including the latest government statistics released yesterday. Many traders who fueled the record 86-point drop in the Dow Jones industrial average on Thursday were relying on a report last week showing that civilian unemployment in August declined from 6.9 to 6.8 percent, economists said.</br></br>However, economists said that a small drop in unemployment for one month does not make a trend and that other statistics suggest continued stagnation.</br></br>The Labor Department yesterday reported that the increase in the producer price index followed a 0.4 percent decline in July and no change in June.</br></br>In a separate report, the Commerce Department reported that the retail sales increase was the largest since a 0.9 percent rise in April. However, the increase in August was all attributed to brisk auto sales. Sales were up 0.3 percent in July.