Retail Prices Skid--Biggest Buyers’ Bonanza Since ’49 : Best of Good News Over--Analysts

Retail prices, driven by slumping gasoline costs, dipped 0.3% in April for the biggest three-month bargain for consumers in 37 years, the government reported today. But analysts said the best of the good inflation news is over.

The drop in the Labor Department’s consumer price index followed back-to-back declines of 0.4% in February and March.

Still, the dramatic fall in oil prices--a nose dive that has now ended--masked the fact that prices in most other categories have been rising.

And further increases, partially reflecting increases in the price of imports from the weakening U.S. dollar, are expected in the months ahead.

Excluding energy, consumer prices rose 0.4% in April, with gains posted for food, housing, clothing and entertainment.

Less Than March Decline

April’s 0.3% decline, equal to a 3.3% dip if computed on an annual basis, was propelled by an 11.3% drop in the price of gasoline, slightly less than the 12% drop of March.

From February through April, prices at the pump fell 26.5% to levels last seen in mid-1979. However, since the April figures were collected, retail gasoline prices have edged up.

“We’ve seen it all. Now we’re going to see inflation creeping back up to the 4% level where it was before,” said Dorothea Otte, a Georgia State University economist who specializes in price activity.

So far this year, inflation has been running at an annual rate of 2.3%. By contrast, consumer prices rose 3.8% in all of 1985.

In a separate report, the Commerce Department said Americans’ personal income rose 1.2% in April. It was the largest increase in two years but it was due mostly to unusually large government subsidy payments to farmers from a new program. Without the farm subsidies, the April gain would have been a 0.2% rise, matching the March increase.

‘No Sign of Diminishing’

Consumer spending rose 0.3% in April after a 0.1% rise in March.

At the White House, presidential spokesman Larry Speakes said the United States, now registering its 41st consecutive month of economic growth, is “enjoying an economic expansion that shows no signs of diminishing.”

But private analysts saw less to cheer about.

“Inflation isn’t dead. It’s just low,” said Christopher Caton, an economist at Data Resources Inc. in Lexington, Mass.

Caton said that by late summer the monthly price index could begin registering annual inflation rates in the 5% range as oil prices begin to slowly rise and the price impact of the falling dollar becomes more pronounced.

3 Consecutive Declines

Over the last three months, consumer prices have dropped at a 4.3% annual rate, the largest three-month decrease since November, 1948-January, 1949. And not since early 1952 have there been three consecutive declines.

Food costs were up 0.3% in April--including a 0.2% rise in grocery prices, the first boost in this category since January.

Fresh fruit and vegetable prices rose 7%; lettuce prices climbed 26.7%. But beef prices fell 2.9% in their fourth consecutive drop. Prices for poultry, fish and eggs also were down slightly.