The economy is declining at a 2.2 percent annual rate this quarter, reversing modest gains in the gross national product over the previous six months, according to a Commerce Department estimate disclosed yesterday.
Reagan administration officials disclosed the so-called flash estimate just as Commerce officially revised upward its figure for third-quarter GNP so that it now shows a 0.7 percent rate of gain in output, adjusted for inflation. Earlier, Commerce reported no change in the GNP.
Meanwhile, the recession continued to hold down inflation. The Labor Department reported that consumer prices rose a scant 0.1 percent in November after seasonal adjustment. During the past 12 months, consumer prices were up 4.6 percent, compared with 9.6 percent in the year ended in November 1981. In the past three months, consumer prices have risen at a 2.9 percent annual rate.
The Labor Department also said that real average weekly earnings were unchanged from October to November as a 0.3 percent increase in average hourly earnings was offset by a drop in the number of hours worked and the increase in consumer prices.
At the White House, spokesman Larry Speakes sought to focus on inflation, not recession. "It's clear we have brought about a dramatic decline in the underlying rate of inflation in the two years since the president has been in office," he said.
Private economists, however, attributed the lower inflation rate largely to the long slump. "The small rise in the consumer price index for November and over the past year represents the fallout of the deepest downturn since the 1930s," said Allen Sinai, senior economist at Data Resources Inc.
The Commerce estimate for GNP for the current three months indicates a larger decline than most private forecasters predicted. Of a group of 40 prominent forecasters surveyed recently, nearly 30 were still looking for at least some growth in the economy this quarter.
However, the flash estimate, which is based on incomplete information because the quarter is not yet over and many statistics are not yet available, may differ markedly from later official estimates. For that reason, it is not published officially and is intended only for use by administration policymakers.
The Commerce Department also reported yesterday that new orders for manufactured durable goods rose 1.9 percent, or $1.3 billion, in November to a seasonally adjusted $70.9 billion. The increase was another sign that the recession could end before long, analysts said.
But the rise in new orders followed a 5 percent drop in October, and shipments of goods still outpaced orders so that the backlog fell for the 16th month in a row.
The upward revision in third-quarter GNP was the result of higher figures for net exports, business fixed investment and federal government purchases. Personal consumption spending and residential investment were revised downward.
Real output fell by more than a 5 percent annual rate in the fourth quarter of last year and in the first quarter of 1982. It then rose at a 2.1 percent rate in the second quarter and a 0.7 percent rate in the third.
The pluses in both the second and third quarters were somewhat misleading, however, since final sales of goods and services declined in both three-month periods. Only hefty but unwanted increases in business inventories kept total GNP rising. Production cuts intended to reduce those stocks of goods represent one reason total output is now falling and unemployment is approaching 11 percent.
The 0.1 percent increase in the consumer price index last month followed a 0.5 percent jump in October. Several major components within the CPI showed smaller increases or even declines.
As a result of a 2.3-percent drop in mortgage interest costs, the housing portion of the index fell 0.2 percent. The apparel and upkeep component went down 0.2 percent.
Food and beverage prices rose 0.1 percent for the month and are only 3.4 percent higher than they were a year earlier. Transportation costs rose 0.3 percent as a decline in new car prices and financing partially offset a 2 percent climb in used car prices and a 0.3 percent rise in gasoline prices.
Medical care costs went up another 1 percent, slightly more than in most months during the past year.