Producer Prices Up 0.5; Jitters Over Inflation Ease
Two government reports helped calm inflation .jitters yesterday, sending long-term interest rates down in bond market trading and taking pressure off top Federal Reserve policy makers to launch another preemptive strike on inflation when they meet next week.</br></br>The Labor Department reported that the prices for finished goods charged by manufacturers and other producers increased a modest 0.1 percent in February, excluding volatile energy and food prices. A sharp rise in energy prices drove the overall producer price index up 0.5 percent.</br></br>At the same time, the Fed reported that while the output of auto-related plants surged in February, bad weather helped keep growth at a tame 0.1 percent in the rest of the industrial sector.</br></br>"In terms of inflation, there is not much to worry about," said Joel Prak-ken of Laurence Meyer & Associates of St. Louis, reflecting the general reaction among economists.</br></br>Laura DÛªAndrea Tyson, chairman of President Clinton's Council of Economic Advisers, said the ÛÏinflation fundamentals remain good.Û