Page 6-Saturday, May 10, 1980-The Michigan Daily
Inflation eases to 6.2% rate
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From AP and UPI
WASHINGTON-Producer prices
rose in Aprilat a third their recent rate,
the government said yesterday, a sign
the worst of the current round of
inflation may be over.
Wholesale pries rose 0.5 per cent last
month, the smallest amount in 11
months and far less than March's 1.4
per cent surge, the government said.
UNTIL APRIL, wholeslae prices
were accelerating at an 18 per cent
annual rate. If last month's pace
continued, prices would rise only 6.2 per
cent a yesr, although a continuation of
this trend was viewed as unlikely.
Referring tok the April price report,
the president's chief inflation adviser,
Alfred Kahn, said, "I find it difficult to
say anything very optimistic about it."
"It's all food," he said, referring to a
2.8 per cent decline in food prices. "We
can't expect fighting inflation to be
handledby ever-declining food prices."
HE SAID FOOD prices undoubtedly
will increase again and he fears the
nation's underlying inflation rate,
irrespective of food, remains extremely
high.
A Labor Department economist, John
Early, said of the April price report,
"That is good, encouraging news, but
we can't afford to get too excited. We
haven't whipped inflation yet."
He anticipates bigger wholesale price
increases in coming months, but none
that will approach the 1.4 per cent to 1.5
per cent jumps of earlier this year.
THIS AND OTHER recent
sionn-ineludino fallino-mntpan d
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ther interest rates-led a sampling of end of the year-an inflation pace still wholesale prices have risen 13.5
'conomists in and out of government to historically high and which they believe cent.
ay the country is coming out of the will be extremely hard to get rid of. The Labor Department's mon
cute phase of its worst bout with The slowdown in wholesale prices price report, called the Producer P
nflation inthree decades. last month occurred as a recession Index, for finished goods stood at
But they see consumer prices enveloped the economy. The last month, which means that an i
leclining from recent annual rtes of 18 6.2 per cent to 7 per cent, costing $1 in 1967 increased tok $2.4
per cent to around 10 per cent by the FROM APRIL, 1979 to last month April1980.
American workers to celebrate new
holiday. tomorrow:*'Tax Freedom Day'
per
thly
rice
240
tem
40 in
From the Associated Press
You can stop working for the gover.
nment and start working for yourself.
May 11 is "Tax Freedom Day."
According to the Tax Foundation,
Inc., a research group based, in
Washington, D.C., "Tax Freedom Day"
is the day when the average worker has
earned just enough money since Jan. 1
to satisfy his or her federal, state and
local tax obligations. But another way,
it means that the average worker's tax
bill is equal to all the dollars he or she
earned in the first 131 days of
1980-more than one-third of the year.
A SEPARATE foundation report,
meanwhile, shows that tax collections
at all levels are rising faster than
population growth, personal income or
consumer prices. And state and local
tax collections are growing faster than
federal levies.
is coming later and later every year. In
1979, for example, the average worker
would have earned enough by May 8 to
pay his, or her taxes; in 1978, the
"freedom" date was May 6. Fifty years
ago,_the foundation calculates, it took
the average worker only until Feb. 13 or
42 days to -earn enough to pay the
federal, state and local government.
Using an eight-hour day, foundation
researchers figured out how many,
hours it takes the average American
this year to earn enough to pay for a
number of items. Here's what they
found:
* Taxes: 2 hours and 52 minutes or
35.8per cent;
* Housing and household operations:
1 hour and 29 minutes or 9.Sper cent;
" Food and beverages: 1 hour and 1
minute or 12.7 per cent;
* Miscellaneous expenditures and.
savings: 47 minutes or 9.8 per cent;
* Transportation: 41 minutes or 8.5
per cent;
* Medical care, 29 minutes or 6.1 per
cent;
* Clothing: 22 minutes or 4.6 per cent;
and
* Recreation: 19 minutes or 4 per
cent.
THE FOUNDATION economists also
looked at what's been happening to tax
collections. They calculated that
general state and local tax collec-
tions-not counting unemployment in-
surance-almost tripled from fiscal
1968 to fiscal 1978, rising 187 per cent.
During the same period, the foundation
report showed, federal tax collections
rose 161 per cent; personal incomes
went up 151 per cent; consumer prices
went up 88 per cent; and population
grew by 9 per cent.
According to the foundation, general
tax collections by state and local
governments-added up to $193.6 billion
in fiscal 1978.
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