Consumer Prices Leap 0.5%; Weather Fluctuations Cited

Consumer prices jumped 0.5% in February as retailers introduced higher-priced spring and summer clothes earlier than usual because of warm winter weather in much of the country, the Labor Department reported Tuesday.

Energy prices, which fueled a 1.1% surge in January’s consumer price index, dipped somewhat last month in another reflection of the unusually mild weather patterns. Food prices, however, continued to rise in February.

Economists, viewing the recent ups and downs as the consequence of a warm January and February following a record cold December, have not altered their consensus: Inflation is still running at an annual rate of 4.5% to 5%.

“Weather was the distorting factor here,” said Irwin L. Kellner, chief economist at Manufacturers Hanover in New York. “The warm January and February made people all over the country want to dress like Californians, so there was a clamor for spring and summer clothes and the lines were brought up a month or two early.”

Bureau of Labor Statistics analysts estimated that fully 40% of February’s advance in retail prices was caused by a 3.3% jump in apparel prices.

Although government statisticians normally adjust their numbers to account for such events as the introduction of new product lines, February’s clothing price hikes were subject to no seasonal adjustments because fashion introductions normally occur in March or April.

“That 3.3% increase could not be corrected by the normal seasonal adjustments, and that kind of increase is unlikely to continue,” Kellner noted.

Energy costs, which jumped 5.1% in January as buyers rushed to replenish oil and gasoline inventories depleted by December’s record cold snap, dipped 0.7% in February, the Labor Department reported.

But food prices, which gained 1.8% in January, advanced another 0.5% last month. Both increases reflected big jumps in the price of freeze-damaged fresh fruit and vegetables, which rose 10.2% in January and another 0.9% in February.

Excluding the volatile food and energy elements, the “core” inflation rate in February was 0.5%, the same as the overall rate. In January, core inflation was 0.6%, considerably below the energy-distorted overall rate.

Before seasonal adjustment, consumer prices in the Los Angeles-Long Beach-Anaheim metropolitan area rose a steep 1%, compared to 0.4% nationwide.

CONSUMER PRICE INDEX

Percent change from prior month Feb. ’90 +0.5% Jan. ’90 +1.1% Feb. ’89 +0.4% Source: Labor Department