JANUARY WHOLESALE FOOD PRICES INCREASE 0.1%

ALISON MAXWELL

WASHINGTON -- Wholesale prices for food increased 0.1% in January after showing no change in December, according to Labor Department statistics.

Year-over-year prices were down 0.4%.

In January, increased prices for pork, dairy products, eggs for fresh use, beef and veal, and roasted coffee more than offset falling prices for fresh and dry vegetables, soft drinks, fresh fruits and processed fruits and vegetables.

Egg prices jumped 19.3% for the month, while beef and veal prices increased 2.5% and pork prices increased 6.2%. Coffee prices at wholesale were up 5.3%.

Fresh and dry vegetable prices dropped by 19.9% in January after shooting up 32.3% in December. Fresh fruit and melon prices declined by 2%, while soft drink prices dropped by 0.6%.

Wholesale prices for all finished goods were flat in January, after increasing 0.1% in December and 0.2% in November. The core Producer Price Index, which excludes volatile food and energy prices, fell 0.2% after edging up 0.1% the month before.

"Inflation in producer prices moderated in January," Labor Secretary Alexis Herman said in a statement. "A drop in the price of tobacco products primarily offset the increase in energy prices."

Federal Reserve Chairman Alan Greenspan said inflation dangers still exist and put financial markets on notice to expect further interest rate increases.

"To date, interest-sensitive spending has remained robust, and the Fed will have to stay alert for signs that real interest rates have not yet risen enough to bring the growth of demand into line with that of potential supply." Greenspan said in his twice-yearly economic report to Congress.

"Achieving that alignment seems more pressing today than it did earlier," he said.

Still, Greenspan said the current good times are "unprecedented in my half-century of observing the American economy."