By John S. McClenahen Following considerably smaller increases in January and February, the U.S. Labor Department's Producer Price Index (PPI) for finished goods rose 1% in March. That figure is nearly a half percentage point higher than the 0.6% many economists had anticipated. Higher energy prices were the primary reason for March's increase in the PPI. Energy prices rose 5.5% in March, compared with a 0.4% gain in February. The so-called core PPI -- the index minus energy and food -- was up only 0.1% in March, exactly what economists expected. Meanwhile, U.S. retail and food-service sales rose 0.2% in March to $297.3 billion, reports the U.S. Commerce Department. That was two-tenths of a percentage point below expectations. Sales for this year's first calendar quarter were up 3.2% from the first three months of 2001. "Outside of energy, inflation is not an issue, and consumer spending remains healthy," judges Gerald D. Cohen, a senior economist at Merrill Lynch & Co., New York. Bottom line: Chairman Alan Greenspan and his colleagues on the Federal Open Market Committee are likely to leave the influential federal funds rate at 1.75% at their next scheduled meeting on May 7.