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Signs point to cool economy
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April 14, 1998: 9:22 a.m. ET
U.S. Consumer Price Index, retail sales fall short of Wall Street expectations
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NEW YORK (CNNfn) - The U.S. economy showed few signs of overheating last month as the falling gas prices kept inflation at bay and retail sales were cooler than expected.
The Consumer Price Index was unchanged in March after a 0.1 percent gain in February, the Labor Department announced Tuesday. Wall Street economists had been expecting a gain of 0.1 percent.
Meanwhile, retail sales fell 0.1 percent to $218.1 billion in March, following a revised gain of 0.7 percent in February, the Commerce Department reported. But retail sales were up 3.1 percent from March a year ago.
The bond market took its cues from those signs that inflation is still at bay. The 30-year Treasury was up 4/32 of a point in price, with the yield down to 5.91 percent shortly after the reports were released.
For the first quarter, the CPI rose a paltry 0.2 percent on an annualized rate.
"There are absolutely no price pressures in our system," Delos Smith, an economist at the Conference Board, told CNNfn.
The so-called "core rate" of the CPI - which excludes food and energy costs - rose just 0.1 percent after a gain of 0.3 percent in February. Analysts expected a rise of 0.2 percent.
Energy prices fell for the fourth-straight month, down 1.2 percent in March - fueled mainly by lower petroleum-based energy costs.
On the retail front, sales of durable goods - those designed to last a year or more --fell 0.4 percent in March from February, but were up 4.2 percent from March last year. Nondurable goods rose 0.2 percent from last month and were 2.3 percent above last year.
Smith said March is typically marked by understated retail sales growth while the two previous months are overstated.
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