Wholesale Prices Post Meager 0.2% Increase

Wholesale prices edged up just 0.2% in March, the government said Friday, suggesting that inflation will remain weak in the months ahead no matter what happens to the economy.

In Santa Barbara, where President Reagan is vacationing, spokesman Larry Speakes said: “This good news indicates that we are keeping the lid on inflation while the economy continues to create new jobs at a record rate.”

But other reports Friday did little to straighten out the confusion about whether good times will persist--an uncertainty that has spread to Wall Street and foreign exchange markets.

The Labor Department’s report on wholesale prices showed the best yearly performance in two decades, an inflation rate for business of only 0.3% for the 12 months ended in March.

A separate report from the Federal Reserve Friday showed American consumers added a record amount to their installment debt load in February, a total of $10.4 billion.

That brought to $470 billion the amount of loans other than those secured by real estate on which Americans are making monthly payments.

Some Economists Hold Doubts

However, it also suggested to some economists the peak in the business cycle may be about over, with consumers borrowing more out of need than out of enthusiasm.

A third report provided a deeper look into the economy’s underlying support, showing inventories are piling up as goods move out the front doors of retailers, wholesalers and manufacturers more slowly than suppliers are bringing them in the back doors.

Inventories gained 0.4% in February, twice as fast as sales grew. March may have piled up unsold goods even higher since retail sales, reported Thursday, plunged 1.9%, the biggest drop in more than seven years.

The price report, although interpreted by some as a sign of weak demand, contained no threats of renewed strong inflation. The 0.2% increase at the finished goods end of the supply pipeline was improved upon at the other end, where raw materials just getting under way to consumers dropped in price by 1.5%.

The raw materials reading was even more impressive because is was the third consecutive large monthly decline, likely locking in price moderation for the next several months.

The economy’s future has been an especially frustrating puzzle ever since the government estimated, on March 21, the gross national product expanded at a surprisingly weak 2.1% rate in the first quarter.