Inflation slowed a bit further last month, the government reported yesterday, as retail prices continued to moderate gradually following recent sharp reductions in wholesale prices.
The Labor Deparment's consumer price index rose a modest 0.3 per cent in August, its smallest jump in nine months. The index increased 0.4 per cent in July and 0.6 per cent in June. However, in the Washington area food prices rose 0.5 per cent in August.
Carter administration officials hailed the new report as encouraging. However, economist cautioned that while there may be some further moderation this month, prices probably will begin edging up again in October and November.
Maynard S. Comiez, the Commerce Department 's deputy chief economist said the August performance did not alter the longer term outlook. He predicted the underlying rate of inflation would continue at about 6 per cent.
Both food and non-food prices behaved moderately. Each rose 0.3 per cent in August, following 0.1 per cent increase in July. The price figures all were compiled after adjustment to compensate for seasonal patterns.
The big nesw in August was a visible slowing in the cost of services, which rose 0.5 per cent, well below their pace in the seven previous months.
However, analysts pointed out that most of that slowdown stemmed from an unexplained decline in the index for mortage interest rates, which was described as a fluke not likely to be repeated. Utility prices also eased somewhat.
Although grocery prices rose only moderately, analyst noted that the slowdown did not fully reflect the past few months reductions in wholesale farm prices - suggesting that some stores may be using the opportunity to bolster sagging profit margins.
In the Washington area, food prices rose an uncomfortable 0.5 per cent in August, more than offsetting 0.2 per cent decline tht previous month. There were sharp increases reported in prices of meats, poultry and fish, but prices of cereals, bakery products and fresh fruits and vegetables declined.
Overall consumer prices for the metropolitan area, complied only once every three months, rose 1.8 per cent between June and August, down from a 2.1 per cent jump recorded in the previous period. The improvement stemmed mainly from declines in food prices.
The latest increase brought the pace of inflation at the national level over the past three months to an annual rate of 5.4 per cent - high by historical standards, but still well below the 10 per cent rate recorded between January and March.
Over the past 12 months, retail prices have risen by 6.6 per cent.
But the improvement did not show up in workers' purchasing power last month. The department repaorted that real spendable earnings - take-home pay adjusted or taxes and inflation - declined 0.6 per cent in August, its fifth such dip in a year.
Over the past 12 months, purchasing power of workers has risen 2.8 per cent, but analysts said this stemmed primarilyfrom the federal tax reductions that went into effect last June, and not from any improvement in living standards.
In its report on food prices, the department showed some slowing itn prices of dairy prodcuts, cereals and bakery products and processed fruits and vegetables. Beef prices declined for the fourth month in a row. Pork and poultry prices all fell somehwhat.
Among non-food commodities, the largest declines were in prices of used cars and alcoholic beverages. However prices of fuel oil and coal apparel accelerated sharply over the month. New car prices also rose more rapidly.
The August figures brought the overall consumer price index to a level 183.3 per cent of its 1967 average. That means it took $18.33 to buy the same goods and services last month that cost a decade ago.