Despite the sharpest jump in food prices since 1980, inflation rose last month at the wholesale level by only 0.4 percent, or an annual rate of 5.3 percent, the government said yesterday.
Treasury Secretary Donald Regan called it "a strong signal that inflation is going to stay down."
Moreover, Regan said, the wholesale report should "serve to strengthen the backbone of some of my Wall Street friends who have been skeptical about the drop in inflation." At the White House, a spokesman for President Reagan agreed, calling the figures "good news."
The Labor Department's producer price index, a broad measure of price changes for dealers and wholesalers, increased to 277.4, meaning that dealers paid $277.40 for the same goods they purchased for $100 in 1967.
Lower prices for automobiles, gasoline and natural gas, as well as price stability for machinery and factory equipment, came close to offsetting a 1.1 percent surge in consumer food prices. That increase was the biggest in food prices since a widespread drought generated a 2.6 percent jump in August 1980. Consumer food prices had held steady in December and actually declined somewhat in the three previous months.
This time, the food increases were the result of cold weather damage to California and Florida produce crops, a freeze-induced slowdown in the delivery of meat and a cutback by hog producers.
"It was a minor food shock brought about by the weather," said Donald Ratajczak, head of Georgia State University's Economic Forecasting Project.
"It just goes to show how far we have come in holding down inflation that we can take a weather shock and hardly notice it in the overall index," he said.
Energy costs dropped 0.9 percent last month, following advances of more than 1 percent in November and December. "Prices turned down for gasoline and natural gas, and prices for home heating oil registered a small increase for the third consecutive month," the report said.
Meat prices, especially pork, accounted for much of the jump in food costs last month, it said.
John Urbanchuck, director of the agricultural service at Wharton Econometric Forecasting Associates in Philadelphia, said figures indicate the cold weather resulted in an increased loss of cattle and hogs and a declining yield from those herds.
Ratajczak said the heavy rains in California showed up some in prices of produce.
But Urbanchuck said he was surprised that the bad weather in Florida and California didn't have a greater effect on fruit and vegetable prices. "That's a little perplexing," he said.
January's 0.4 percent gain in inflation at the wholesale level compares with rises of 0.3 percent in December and 0.5 percent in November, while last month's 5.3 percent increase in the annual rate compares with boosts of 7 percent for all of 1981 and 11.8 percent for 1980.
The report also said the prices of goods other than food and energy rose 0.5 percent last month, after no change in December.
A breakdown of those prices showed costs of passenger cars fell in January after climbing in December, it said.
But prices picked up for periodicals, newspapers, textile housefurnishings, prescription drugs, alcoholic beverages and cosmetics.
Capital equipment prices were up 0.4 percent in January after a rise of 0.6 percent in the previous month.