Two Reports Suggest Inflation Curbed;Retail Sales Up Strongly in Nov.; Producer Price Index Rises Slightly
The U.S. economy continued to grow rapidly last month, but the growth is not adding much to inflation, according to two government reports released yesterday.</br></br>Retail sales rose 1.2 percent last month - about twice what many analysts had expected - as consumers stepped up their purchases of new cars, light trucks, furniture and building supplies, the Commerce Department said.</br></br>On the strength of November's sales report, and upward revisions for September and October that were announced yesterday, forecasters said the growth rate for the three months from October through December should hit 4 percent or more despite the Federal Reserve's efforts to slow that pace by raising short-term interest rates. Fed Chairman Alan Greenspan and other central bank officials have said that if growth does not slow, the economy will overheat and cause inflation to accelerate.</br></br>But the other report out yesterday - on the prices producers charge when they first sell completed goods - showed few signs of added inflation.</br></br>The Labor Department said the producer price index rose 0.5 percent last month largely because of a large upswing in gasoline and some other energy prices. Falling energy prices had led the index to declines of a half-percentage point in each of the previous two months.