Energy Prices Hold Inflation to 0.2% in July

A slide in energy prices and only a small increase in food costs held the retail inflation rate to 0.2% in July, the government reported today.

Food prices, which declined at an annual rate of 0.8% during the previous three months, inched up by 0.1% last month.

Energy costs--finally beginning to follow a general decline in world crude oil prices--were down, with gasoline prices falling 0.4% while fuel oil prices declined 1.3%.

(In Los Angeles and Orange counties, overall retail prices rose in July by 0.6% from the previous month, the Labor Department said. Leading the increases were higher costs for housing, public transportation and medical care.)

Higher Shelter Costs

In the national consumer price report, the government said shelter costs, which include both renter and homeowner expenses, accounted for nearly three-fourths of the increase in July. Those costs have been rising at an annual rate of about 6% so far this year and went up an additional 0.6% in July.

The effect of the Labor Department’s Consumer Price Index for July was to add further confirmation to analysts’ long-standing predictions that inflation for 1985 could be the lowest in more a decade.

Meanwhile, orders to U.S. factories for “big ticket” durable goods fell a sharp 2.8% in July, adding a setback to Reagan Administration hopes for an economic rebound in the second half of the year.

Durable Goods Off

The Commerce Department reported that orders for durable goods--items expected to last three or more years--totaled $103.6 billion last month, following a 3.6% June increase. The decline was the largest since a 2.9% March drop.

The July increase in the inflation rate came on the heels of back-to-back 0.2% rises in May and June.