Consumer Prices Climb 0.2 Percent

Consumer prices remained under control in July as the economy continued moderate expansion, a batch of reports showed Thursday.

“The data continues to paint a picture of an economy that is performing exceptionally well,” said economist Chris Varvares of Macroeconomic Advisers in St. Louis. “Inflation is still very tame, with no sign of acceleration.”

The Labor Department’s Consumer Price Index rose a modest 0.2 percent in July, slightly more than the 0.1 percent recorded during the previous four months and the biggest advance since a 0.3 percent gain in February.

The Federal Reserve reported separately that the increase in industrial production slowed to a 0.2 percent rate in July after rising 0.3 percent a month earlier.

It said the pace was affected by a drop in motor vehicle production as automakers shut down for several weeks for their annual new-model retooling.

A Commerce Department report indicated production may not be so strong during the second half of 1997. It said business inventories jumped 0.7 percent in June.

That’s “good news for production in the second quarter, but bad news for the third quarter,” Varvares said. “It sets up a situation where you expect production to be pulled back” until the backlog is reduced.