The nation's unemployment rate remained at 7.3 percent in April for the third month in a row while producer prices for finished goods rose 0.8 percent, significantly less than in March, the Labor Department reported yesterday.
Details of both reports suggest that the recession that was widely predicted for this quarter at the least has been pushed into the future.
Separately, the Federal Reserve said that the measure of the nation's money supply known as M1-B fell by $3.6 billion $428.6 billion in the week ended April 28. [tables on D9]. A closely watched aggregate, M1-B includes currency in circulation and deposits in accounts at financial institutions against which checks may be written.
[New of the decline in M1-B caused markups in government securities and corporate bond prices of as much as one-half point yesterday, while municipal bond prices jumped a quick 3/8 point, Dow Jones News Service reported.]
Recent large increases in M1-B and other money-supply measures caused the Fed to tighten credit availability to keep the money supply on the central's bank's chosen path. The Fed's tightening contributed to a runup in interest rates. The latest figures could help put a cap on rates such as the banks' prime, which hit 19 percent early this week.
The unexpectedly sharp increases in the money supply in previous weeks provided evidence the economy was not getting weaker as many forecasters predicted.
Similar evidence came from the Labor Department's report on total employment -- as shown by the monthly national survey of households -- which rose by a strong 560,000 to 98,976,000 last month. A separate survey of payroll employment showed a 220,000 drop largely because of the continuing coal strike and a decline in construction, a sector hard hit by rising interest rates, the department said.
Seasonally adjusted unemployment rates for adult men (5.8 percent), for adult women (6.6 percent) and for teenagers (19.1 percent) changed little between the two months. The rate for whites remained at 6 1/2 percent, while the rate for black and other workers fell from 13.7 percent to 13.2 percent.
Prices of finished goods -- those ready for sale to consumers -- rose less sharply in April because energy prices increased by only 1.6 percent compared with 6.1 percent in March. However, even the 1.6 percent figure probably overstates the actual April experience because prices for refined petroleum products such as gasoline and home heating oil are entered into the index with a one-month lag.
Refiners raised their prices sharply early in the year as a result of higher crude oil prices set by the Organization of Petroleum Exporting Countries and decontrol of domestic crude oil prices. More recently, the market for gasoline has been weak and, with huge stocks on hand, refiners hae not been able to raise prices further. The index showed gasoline prices up 1.3 percent last month compared with a 7 1/2 percent jump in March.
Consumer food prices were unchanged for the month as large increases in eggs, pork, bakery products, fresh fruits and orange juice were offset by declines for fresh vegetables, poultry, sugar, coffee, rice and beef.
But higher prices for foods and feeds in the indexes for intermediate and crude materials suggest finished-food prices may be rising soon. At the intermediate level, such prices rose one-half percent in April after four consecutive monthly declines. An upturn in prices of cattle, hogs, wheat and soybeans pushed up the index for crude foodstuffs and feedstuffs 1 1/2 percent. That index fell an average of 2.3 percent monthly between November and March.
One signal that the economy is stronger than expected was the large growth in employment shown by the household survey. Another was the first increase in prices for nonfood crude materials other than for energy.
These prices, many of which are extremely sensitive to trends in the economy, turned upward in April by 3 percent following four months in which they averaged a 3.8 percent decline per month.
Also signaling that inflation is still a serious problem, prices of finished consumer goods other than foods rose 1.1 percent. Passenger car prices increased 1.4 percent after only a 0.3 percent rise in March when the manufacturer' rebate programs were in full swing.
Led by a 2 percent jump in truck prices, the index for finished capital goods rose 0.9 percent for the month compared to 0.7 percent in March.
The Labor Department's report on employment also included another antirecession sign. In April, 56.7 percent of 172 private nonagricultural industries surveyed increased the number of people on their payrolls between March and April. While that is a smaller percentage than added from August through January, whne the monthly numbers generally were between 60 percent and 65 percent, it is still well above recession levels. Last May, for instance, when the economy was plunging, only 28.8 percent of the industries were increasing their payrolls.