May Statistics Ease Fears About Inflation: Wholesale Prices Steady; Sales Up Slightly
Wholesale pikes held steady last month, the Labor Department reported yesterday, easing fears about inflation and lessening the likelihood that the Federal Resave would boost interest rates to fight it.</br></br>The report, combined with another showing consumer spending increasing less than expected in May, sent interest rates on bonds down and stock prices up. The Dow Jones industrial average rose 13.29 to 3505.01 in moderate trading.</br></br>It was the first time since December that the overall producer price index failed to rise, and a sharp drop from the 0.6 percent increase reported for April, the biggest one-month gain in 2& years. Many economists had expected an increase in wholesale prices, and greeted yesterdayÛªs numbers with reM.</br></br>"This is certainly a good sign that we have an uptick" in die economy, Laura DÛªAndrea Tyson, chairman of the presidentÛªs Council of Economic Advisers, told reporters yesterday. "There's nothing in the fundamental [economic indicators] that would be evidence for sustained growth in the inflation rate."</br></br>Brace Steinberg, manager of micro-economic analysis at Merrill Lynch-& Co., called the unchanged price index ÛÏextremely constructive." Since May 1992 the core PPI, winch excludes food and energy, has gone up only L7 percent Sternberg said that is ÛÏas low as weÛªve seen wholesale inflation in a quarter-century.Û