Retail, Trade Data Point to Stronger Economic Growth
Positive new economic data on both retail sales and the U.S. trade deficit indicate that the U.S. economy grew at a torrid 7 percent annual rate in the last three months of 1993, analysts said yesterday.</br></br>The signs of booming growth caused a jump in long-term interest rates as investors worried that a stronger economy would generate more inflation.</br></br>I In pushing rates on 30-year Treasury bonds to 6.54 percent, their highest level since last summer, investors ignored another report from the Labor Department that consum-jer prices last month were unchanged from their December level and were up only 2.5 percent in the past year, the smallest price rise since 1987.</br></br>ÐÊ So-called core inflationÛÓthe increase in prices other than for food and energyÛÓwas 0.1 percent last</br></br>The perverse market reaction to the good news on inflation surprised such analysts as Bruce Steinberg, macroeconomics manager for Merrill Lynch & Co. in New York.