Washington-area consumer prices rose by less than 1 percent in the past two months, the slowest rate of local inflation in more than a year.
However, Labor Department statistics published yesterday attributed the moderating price trend during August and September to a decline in housing prices and, more specifically, to lower mortgage interest costs. These rates had declined here during the summer but since have rebounded.
Nevertheless, the 0.8 percent consumer price rise for the recent months was a welcome respite for Washingtonians, who had experienced a 2.5 percent increase in the previous two months alone and an 11.8 percent increase in the last year.
And there was good news on mortgage rates, too. A survey by Peeke and Associates indicated that the average interest being charged by area lending institutions has declined slightly from a recent peak of 14 percent. Seesawing mortgage rates, which soared to 17 percent at some savings associations earlier this year, had declined to about 12 percent in midsummer before moving back higher.
Separately, the Commerce Department reported unusually strong sales volume at area retailers during July. Retail sales of $1.29 billion during that month were up 19 percent from the same period in 1979, although virtually all of the gain was in nondurable goods such as food. Sales at downtown Washington department stores in July were up 5 percent from a year ago.
According to the Labor Department, the metropolitan consumer price index now stands at 249.2, which means that goods and services costing $100 in 1967 now fetch $249.20.
Higher transportation, food and apparel costs in the recent months were partially offset by the lower housing costs. Transportation prices were up 2 percent as a result of higher costs for used and new cars, airline travel and auto insurance.Apparel prices jumped 4.4 percent after declining 3.8 percent in the preceding four months, reflecting higher prices across the board for most men's and women's apparel lines.
In the volatile food sector, where grocery store officials have predicted sharp price hikes in the coming year, supermarket prices increased 3.4 percent in the past two months. Higher prices were reported for pork, soft drinks, beef, poultry, eggs and fish. Of major food categories, only fresh vegetable prices were down because of the local harvest season. Restaurant prices also dipped by 0.3 percent.
Area tuition and other school costs soared 10 percent in the recent two months, while medical care rose 0.9 percent and entertainment costs rose 1 percent.
The 11.8 percent rate of local price increases since Spetember 1979 compares with a national city average rise of 12.7 percent. Over the last 12 months, area supermarket prices have increased 10.2 percent (versus 10.3 percent nationally), housing costs rose 12.7 percent here (versus 14.1 percent), and transportation costs were up 17 percent (versus 15 percent), to account for the bulk of average consumer spending.