Consumers should expect prices to climb a bit faster as the year goes on, forecasters say, as part of the economic recovery's natural maturing process. The Consumer Price Index (CPI) for April indicates that an uptick in the pace of inflation may already be under way. Consumer prices rose a seasonally adjusted 0.5 percent in April, vs. an increase of 0.2 in March and 0.4 in February. The hike in April translates into an annual inflation rate of 5.6 percent.
Despite the recent reduction in excess factory capacity, most economists do not see a return to anything near the double-digit inflation rates the United States experienced in 1979 and 1980. ''I do not think the pace we are going at . . . implies a necessary resurgence of inflation,'' argues Sidney Jones, undersecretary of Commerce for economic affairs.
And although seasonal fluctuations in energy prices played a role in pushing up the CPI's housing and transportation segments in April, economists do not expect the war in the Gulf to push up US energy prices to a marked degree. A key reason is the substantial excess oil-production capacity in the world.
At the moment, the Organization of Petroleum Exporting Countries (OPEC) ''is operating at little more than half of its capacity'' of 31 million barrels a day , says Robert Wescott of Wharton Econometric Forecasting Associates. So a disruption of supply from the Gulf would trigger offsetting production boosts from non-Gulf OPEC members such as Nigeria and Venezuela, as well as from major oil-producing countries such as Mexico, which are not members of OPEC.
Spot (or cash-market) oil prices have been relatively immune to news of conflict in the Gulf and are at roughly the same level as a year ago.
In fact, if a major oil-supply disruption does not take place, some energy analysts say gasoline prices could reverse their seasonal pattern and fall over the summer. The drop would be fueled by larger-than-normal supplies bumping into demand that has been reduced by conservation efforts and more fuel-efficient autos.
If oil supplies are disrupted, analysts say, gas prices could firm, but supplies are expected to be adequate.
While energy prices are expected to be relatively well-behaved, overall ''the best news is behind us,'' on inflation says Lawrence Chimerine, chairman of Chase Econometrics, a forecasting firm. By year's end, Chase expects consumer prices to be rising at a 5.9 percent pace, vs. an inflation rate of 3.2 percent during 1983.
And Citibank economist Alan Murray recently told clients that ''the price serpent is slithering into the garden.'' In an interview he added that Citibank expects prices to be rising at a 7 percent pace by year's end.
A pickup in prices when a recovery is a year and a half old is ''natural and normal,'' notes Nicholas Filippello, chief economist at Monsanto Company and president of the National Association of Business Economists (NABE). ''It is nothing to be alarmed about.''
Prices rise as a recovery matures for a variety of reasons. For one thing, as demand increases, companies have less excess factory capacity. So, less efficient - and more costly to operate - plants or production lines may be reopened or expensive overtime production ordered. Then, too, when an industry is chugging along nearer full capacity, it is concerned less about losing business to a competitor by raising prices. Bottlenecks and delivery delays develop, prompting customers to boost inventories. That adds to the pressure on production facilities and product prices. As the economy improves, workers tend to seek higher wages, also pushing up inflation.
In a survey earlier this month, 50 percent of the NABE members contacted said their employers were raising prices. When economists were surveyed in February, only 23 percent said their firms were hiking prices.
While many indicators - including industrial production, housing starts, and auto sales - show the US economy is moving faster now than predicted, there also are signs some cooling is occurring, reducing some inflationary pressure. For instance, on Tuesday the government said orders for durable goods fell 6.4 percent in April, the worst decline in nearly four years.
The biggest drop came in defense orders, but orders would have dipped a steep 2.2 percent even without the defense sector's decline.
So far, inflation has behaved better in this recovery than in previous postwar recoveries, according to data compiled by Manufacturers Hanover Trust Company.
In the previous seven recoveries at the same stage, capacity utilization had rebounded an average of 11.3 percent, vs. 19.6 perent in the current recovery. But inflation (as measured by the producer price index) has only sanpped back 2. 3 percent in this recovery vs. an average of 5.0 percent in previous recoveries.