April Food, Energy Costs Push Inflation to Annual Rate of 6% : Despite Tariffs, Electronic Goods Prices Decline

WASHINGTON — Higher prices for food, energy and some imports nudged up consumer prices 0.4% in April, bringing inflation to an annual rate of 6% so far this year, the government reported today.

Economists suggested a weak economy could be keeping prices from going even higher.

Recent declines in the value of the dollar, which are making many foreign goods more expensive, accounted for some of the April increase in the Labor Department’s consumer price index, analysts said.

But one category that bucked the trend and went down in April--by 0.4%--was home appliances and electronics goods, of which imports comprise a major share.

“Technology is still beating the dollar,” said David Wyss, senior economist for Data Resources Inc.

No Impact From Tariffs

The drop in these prices also indicated that the imposition by the Reagan Administration last month of $300 million in tariffs on Japanese televisions, computers and power tools was having no immediate impact on U.S. consumers.

In fact, television prices actually declined 0.8% during the month. “People just bought Korean TVs instead of Japanese ones,” Wyss suggested.

The April consumer price increase, which alone was equivalent to an annual inflation rate of 5.5%, matched 0.4% rises in March and February. Prices had gone up 0.7% in January.

Still, inflation this year, if not approaching the double-digit pace of the late 1970s and early 1980s, was dwarfing the scant 1.1% increase posted for all of 1986 and was running well above the 3.8% rate projected for 1987 by the Reagan Administration.

Food, Energy Costs Rise

April’s price increases were wide-ranging. Food costs were up 0.3%, after declining 0.1% in March, with most of the increase coming from sharply higher fruit and vegetable prices.

Energy prices, still rebounding from last year’s collapse in world oil prices, also rose 0.3%. Gasoline cost 0.7% more at the pump than it did the month before; home heating oil was up 2.5%. But these increases were partially offset by a 0.3% decline in natural gas and electricity costs.

The sharpest major increase was a 1.5% advance in the index for clothing costs, following a 1.7% rise the month before. It was the largest two-month increase for clothing and apparel costs since 1951.

“The strong pickup in clothing prices is because of quotas on Asian imports and as a result prices of imported clothing are going up,” said Maury Harris, chief economist for Paine Webber. “That is one of the spots where inflation is picking up.”