Inflation Up 0.5%; Highest in Two Years : Economy: January’s hike in consumer prices accompanies drop in unemployment figures and marked increase in industrial production.

The worst increase in consumer prices in two years accompanied signs of a resurgent economy, including fewer layoffs and the highest level of industrial production since early in the recession, the government said Thursday.

The Labor Department’s consumer price index shot up 0.5% in January, the biggest increase since January, 1991. If prices continued rising at that rate through the rest of the year, inflation would total 6.1% in 1993, more than double the 2.9% of 1992.

Most economists dismissed the January price report as an aberration, but they warned that stronger economic growth and renewed consumer demand would probably foreclose any reduction in price pressures.

“I think the best news on inflation is behind us, but I don’t believe inflation will accelerate anytime soon,” said economist Mark Zandi of Regional Financial Associates in West Chester, Pa. “I think markets and most people should just shrug this off.”

Meanwhile, other economic reports showed U.S. industry and the job market improving in response to a Christmastime consumer spending spree that carried over into January.

Output by the nation’s factories, mines and utilities rose 0.4% in January, the Federal Reserve said. It was the fourth consecutive increase and pushed production past its previous peak, reached in September, 1990, early in the recession.

The Labor Department said weekly claims for jobless benefits dropped by 19,000 to 321,000 during the week ended Feb. 6. It was the third consecutive decline and the lowest level since the week ended Dec. 26.

“All in all, the expansion is on a solid track, and the locomotive is picking up speed,” said economist David Jones of Aubrey G. Lanston & Co., a New York securities dealer.

In a fourth report, the Commerce Department said the nation’s trade deficit unexpectedly improved in December. It totaled $6.95 billion, down from $7.35 billion in November. Analysts had expected a December imbalance of about $8 billion.

The reduction, however, was not enough to keep the deficit for all of 1992 from posting its first deterioration in five years. It rose from $65.4 billion in 1991 to $84.3 billion last year, including a $49.4-billion deficit with Japan, the worst in four years.

The problem, according to economists, is that the reviving U.S. economy is drawing in more imports while slumping activity in Europe and Japan is dampening the appetite for American goods.

Economists predict that the deficit will grow again in 1993 to about $100 billion. The slumping activity in Europe and Japan probably will continue to dampen the appetite for American goods, while a reviving U.S. economy is encouraging more import buying.

More than half of the trade gap last year was with Japan. It rose $6 billion to $49.4 billion, the worst since 1988. That came even though President Bush began 1992 with a trip to Japan to promote American products.

The trade imbalance with Japan in December alone was $5.09 billion, the worst since October, 1988.

January’s 0.5% increase in the consumer price index was fairly broad-based, but economist Robert G. Dederick of Northern Trust Co. in Chicago said the rise largely was the result of “a confluence of temporary factors.”

Clothing prices registered a sharp 0.8% advance, but that came after a 0.3% decline in December. Tobacco prices, which tend to move irregularly, jumped 1.9%.

Energy costs advanced 0.5% in January because of a 1.5% increase in gasoline prices. Food prices rose 0.4% in January, mainly because of a 1.7% increase in beef prices, the largest since January, 1990.

Excluding food and energy, prices rose 0.5%, the largest increase in three months.

The various changes left the consumer price index at 142.6 in January, meaning that a market basket of goods costing $100 in the base period of 1982-84 would have cost $142.60 last month.

Dederick said Federal Reserve Chairman Alan Greenspan probably will dismiss the January inflation numbers when he delivers his twice-a-year monetary policy report to Congress on Friday.