Clothing prices fell 0.7 percent, the most since December 1982, led by a 1.4 percent drop in costs for men's and boy's apparel. A 4.4 percent rise in tobacco costs, the biggest in almost a year, and a 4.2 percent increase for gasoline kept the producer price index from falling further.
Capital goods
Capital goods prices, a measure of demand for business equipment, fell 0.1 percent in April after rising 0.1 percent in March. Computer prices fell 1.3 percent and were 27 percent lower from a year earlier. Prices of light trucks fell 1.4 percent and were down 2.4 percent from April 2001.
"I don't think any company can dominate the market or dictate prices," said Mike Larson, Hewlett-Packard Co's senior vice president in charge of PC sales in the Americas.
Concerns that business investment in new factories, equipment and software will be slow to pick up were the primary reason for the drop in expectations, the Blue Chip survey showed.
The Fed's Open Market Committee is also looking for signs of business investment in equipment and software, which has fallen for more than a year.
"The short-term outlook in capital investment is rather mixed," Fed Chairman Alan Greenspan said Friday.
Price increases
Price increases were still larger for semi-finished materials and raw goods. Intermediate goods prices rose 0.9 percent in April, led by petroleum products such as jet fuel and gasoline, and by steel. The US imposed tariffs on imported steel in March.
Intermediate prices are still down 2.4 percent from the same month last year.
Prices for electronic components, which include semiconductors, fell 0.4 percent in April and were down 1.7 percent from a year earlier.
Prices for some intermediate goods show how manufacturing has emerged this year from an 18-month slump. Chemicals and resins increased.
Dow Chemical Co, the largest US chemical maker, is among companies reporting higher demand for some products. Rail shipments of chemicals were up almost a third in late April from the start of the year, data from the Association of American Railroads Show.
Prices for crude goods, which are used at the earliest stage of production, rose 5.5 percent after rising 4 percent in March.
Petroleum and natural gas costs helped drive up that index. Core crude prices rose 3.6 percent, led by scrap metal, after falling 0.7 percent in March. Still, core crude prices are down 19 percent from a year ago.
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