Inflation Fell To 6-Year Low During 1992 --- Consumer Prices Rose 2.9%; Weak Labor Market, Slow Economy Cited
WASHINGTON -- A weak labor market, increased productivity and a global economic slowdown helped push inflation to its lowest level in six years in 1992, and those factors are likely to keep prices in check this year as well.</br></br>The Labor Department said consumer prices rose only 2.9% in the year ended in December. Excluding the volatile food and energy sectors, which analysts say gives a more accurate measure of inflation, consumer prices rose 3.3%, the slowest pace since 1972.</br></br>"Inflation is just very well under control. There are no signs of it increasing much in 1993 either," said Bruce Steinberg, senior economist for Merrill Lynch in New York.</br></br>A variety of factors kept inflation low last year. For one, labor costs, which account for roughly two-thirds of price increases, slowed greatly.</br></br>In December, for example, average weekly earnings dropped 1% to $369.84. For the year ended in December, weekly earnings fell 1.3%. While that's good news for employers, the average American is frustrated. Prices for consumer goods may be increasing only slowly, but the consumers have less money to spend.