Consumer prices rose a seasonally adjusted 1.1 percent in December, the largest jump since March, pushing the increase for all of 1980 to 12.4 percent, the Labor Department reported yesterday.
Higher prices for food, housing and transportation accounted for nearly all of the month's increase.Rising mortgage interest rates, which many economists say distort the consumer price index, alone were responsible for more than one-fourth of the reported rise.
The lastest CPI will provide ammunition for President Reagan, who plans to make an address to the nation soon to say economic conditions are worse than he and his advisers had anticipated. The speech, administration sources said, will come before a mid-February congressional recess and is intended to encourage the public to press their senators and representatives to support the package of tax and spending cuts Reagan will propose later in the month.
Murray Weidenbaum, named yesterday as chairman of the Council of Economic Advisers, said at the White House that the latest increase in consumer prices "surely indicates the inflationary legacy of the Carter administration is a very substantial one."
Weidenbaum declined to predict a quick drop in inflation even if Congress promptly enacts the Reagan policy changes. "For the first year and part of the second we have to look at the inputs . . . . Then in the future years we can look at the outputs, what are the results in the inflation and unemployment rates," he said.
The 12.4 percent December-to-December increase was less than the 13.3 percent rise in 1979, but was still the second-worst inflation rate for the nation since 1946. It left the CPI at a level of 258.4, which means that the market basket of goods and services that cost $10 in 1967 now costs $25.84.
The increase in prices was greater than the rise in the department's hourly earnings index. That index, which measures hourly earnings for production or nonsupervisory workers on private nonfarm payrolls, fell 2.8 percent during 1980 after adjustment for inflation.
Of the total 12.4 percent jump, 1.5 percentage points resulted from higher mortgage interest costs, which represent nearly one-tenth of the entire index. Increases in energy prices, which rose about half again as fast as the overall index, were responsible for another 1.7 percentage points.
In December, home financing costs climbed 4.1 percent, even though house prices were unchanged. Fuel oil prices rose 3.4 percent, and charges for gas and electricity were up 1.1 percent.
Food and beverage prices increased 1 percent, slightly less than in November. Poultry, pork, fish and egg prices rose substantially, while beef prices dropped 0.9 percent. Fresh vegetable prices went up 3.7 percent, more than offsetting a 0.7 percent decline in fresh fruit prices.
Transportation costs rose 1 percent, less than the 1.3 percent increase in November. Used-car prices climbed 3.3 percent, gasoline costs 1.1 percent and charges for automobile financing 3.2 percent.
Apparel and upkeep items fell 0.1 percent last month and were up over the year only 6.8 percent. Entertainment and medical care rose only 0.3 percent and 0.5 percent, respectively. Both were also up less for the whole year than the overall index. Entertainment costs rose 10 percent and medical costs 9.6 percent.
Most forecasters expect consumer prices to rise just about as fast this year as in 1980, with food and energy costs leading the way.