Inflation Report Comes in Like a Lamb : Economy: The consumer price index for February goes up 0.3%. Housing starts make a slight comeback.

Despite the lingering effects of winter, there was little inflation and a slight rebound in housing starts last month, according to new government reports Wednesday.

The Labor Department said consumer prices rose at an annual rate of 0.3% in February, and the Commerce Department said housing starts for the month were up 4.1%, to a seasonally adjusted annual rate of 1.31 million.

“We may not get any further deceleration (in prices), but certainly growth is modest enough to prevent any serious pressures on prices,” said economist Sandra Shaber of WEFA Group in Bala Cynwyd, Pa. “I don’t see any sign of significant inflation around.”

Bruce Steinberg, an economist with Merrill Lynch & Co. in New York, agreed, saying: “Inflation remained well-contained in February. . . . Basically, there is almost no goods inflation in the United States.”

Analysts attributed much of the 0.3% increase in the Labor Department’s consumer price index to winter-related fuel demands, which they said will dissipate with the spring thaws.

They said the increase in housing starts would have been even greater had it not been for storms and freezing weather that produced a 22% plunge in new construction in January.

“We lost a lot of activity in January and February,” said economist David F. Seiders of the National Assn. of Home Builders. “We should get that back within a couple of months.”

Still, Seiders maintained that housing starts reached their cyclical high in December, when they hit an annual rate of 1.61 million. However, he predicted that they will remain at a “healthy level” of 1.41 million this year, up from 1.29 million in 1993.

The Labor Department also reported that average weekly earnings, adjusted for inflation, fell 1.5% during February, the largest decline since a similar 1.5% decrease in September, 1992.

The consumer price index did not rise at all in January--the first month in more than four years that there was no increase--and edged up at an annual rate of only 0.2% in December.

The February increase was led by a 1.6% surge in energy prices, including a 7.2% jump in the cost of heating oil, the first since June and the largest since a 12.6% increase in October, 1990.

Other energy-component increases included natural gas, up 1.5%; electricity, up 0.3%, and gasoline, up 1.8%.

On the other hand, food costs fell 0.3% in February following a 0.1% dip in January.

Fresh vegetable prices plunged 4.9%, including a 26.6% drop for tomatoes. Prices for fresh fruits were down 4.4%.

Beef costs declined 0.3% and poultry prices edged down 0.1%. Pork rose 1%.

Housing Starts

Seasonally adjusted annual rate, in millions of units:

Feb., ‘94: 1.31

Source: Commerce Department

Consumer Price Index

Percent change from prior month, seasonally adjusted:

Feb., ‘94: +0.3%

Source: Labor Department