April 14, 2002	Sunday	Muharram 30, 1423

WASHINGTON, April 13: The US economy has performed a welcome “soft take-off”, experts said on Friday, as fresh data showed inflation, consumer confidence and store sales all moderating.

The figures eased fears that US Federal Reserve Chairman Alan Greenspan may have to jack up interest rates to temper inflationary pressures, economists said.

Traditionally people talk about a soft landing; I think this is the soft take-off, Wachovia Securities economist John Silvia said.

This is just not fast enough for the Fed to get all that upset with respect to an economic boom. It is a recovery but it is a recovery within measure.

US producer prices surged 1.0 per cent in March the steepest jump in 14 months but the culprit was clearly energy prices, which soared 5.5 per cent.

The core rate, which excludes volatile energy and food costs, edged up just 0.1 per cent.

The price of gasoline had raced ahead by 21.3 per cent, heating oil by 19.7 percent and liquefied petroleum gas by 23.8 per cent, the Labour Department data showed.

The bottom line is there is really little if any pricing pressure at the factory level, said Sal Guatieri, Chicago-based econMontreal.

Meanwhile, US consumer sentiment slipped unexpectedly in early April, a survey by the University of Michigan showed. A consumer sentiment index compiled from the survey’s results fell to 94.4 points in the preliminary April report aid.

Consumer sentiment slipped in early April as rising oil prices, stock market volatility and Mideast tensions took their toll, Merrill Lynch economist Karen Dexter said.

Shopping malls did only moderate business.

Retail sales roseprevious month, the Commerce Department said.

The consumer continues to spend money, said Naroff Economic Advisors president and chief economist Joel Naroff. It is just that households are not out there shopping ‘till they drop.

Wall Street of blue-chip stocks, the Dow Jones industrials average, rose 14.74 points, or 0.14 per cent, to close at 10,190.82.

During the US economic slowdown last year, Federal Reserve policymakers slashed the target for the key federal funds rate from 6.5.

The big question for investors is when they will retrace those steps. Policymakers on the Federal Open Market Committee are scheduled to meet on May 7, then June 25-26, August 13 and September 24.

I think both reports argue for the Fed monetary stimulus, Guatieri said.

The data indicated the Federal Reserve might make raise rates initially at its June meeting rather than in May, he said.

Wachovia’s Silvia said the Federal Reserve may move to raise rates even later, in Augr and able to withstand the pressure.—AFP