The growth of corporate profits slowed in the third quarter as consumer demand flattened and imports surged, economists said.

But economists did not find the news completely dismaying. The modest inflation rate means the quality of earnings in the quarter was good, and corporate cash flow remained strong. However, experts said one factor that hurt profits -- the inability of many corporations to pass along increased costs to consumers in the form of higher prices -- may continue to slow the growth of profitability.

The producer price index for finished goods fell 0.2 percent in October, marking the first time since 1967 that the index has dropped in three consecutive months. The index fell 0.2 percent in September and 0.1 percent in August.

Many corporations were forced to discount merchandise to remain competitive, and as they cut prices faster than they could cut costs, profits were squeezed.

A surge in imports during the quarter, largely attributable to the strength of the dollar on foreign exchange markets, continued to threaten several basic industries, economists said.

"The most obvious factor that held down the growth in corporate profits in the third quarter was the flattening of sales," said Edward Yardeni, chief economist at Prudential-Bache Securities. "The only reason GNP was up was that inventory investment increased, and that led to unintended inventory accumulation. But this hurt profits through higher interest expenses to carry those inventories. Profits also flattened because of the tremendous increase in imports. The trade deficit doubled from $11 billion to $22 billion during the third quarter as foreigners continued to gain market share in everything from capital goods to consumer goods. The other disappointing thing is that the producer price index has declined for three straight months, which means most American firms have not been able to raise prices."

Corporate profits in the third quarter were 9 percent ahead of the same quarter last year, following year-to-year gains of 45 percent and 28 percent in the first and second quarters, according to a survey of 900 large corporations by Business Week. Sales in the quarter, about $700 billion, fell compared with the previous quarter for the first time in almost two years.

Another factor that slowed the growth of profits was the General Motors Corp. strike. In addition to the direct impact of the conflict at GM, fear of a long strike led many auto industry suppliers to proceed cautiously during the period since they did not want to end up with unintended inventory surpluses.

International Business Machines Corp. posted the biggest quarterly earnings from continuing operations, about $1.6 billion, 22 percent ahead of the same quarter last year. Ashland Oil had the quarter's biggest loss, about $241 million.

Economists said the brisk level of economic activity during the second half of 1983 makes year-to-year profit increases more difficult for corporations, especially as the overall pace of the economic recovery moderates. Most economists expect small gains in profits to continue in this quarter and in 1985.

One economist pointed out that the public seemed to respond less enthusiastically to the 9 percent increase in the expansion of profits, with single-digit inflation, than, for example, to a 15 percent increase in profit growth with a 10 percent rate of inflation. This, he said, is a product of perception, not reality, since what really matters is the rate of real growth, which is the rate of growth adjusted for inflation.

"The industries hardest hit by the increased competition from imports are the ones I worry about most, like steel, textiles, apparel, machinery and automobiles if the Japanese restraint on imports are significantly reduced," said Roger E. Brinner, chief economist at Data Resources Inc. "Foreign competitors are eating away at domestic market share and are also not giving you the opportunity to raise prices."

"Domestic competition is also extremely fierce as a result of gradual deregulation in key industries like financial services, transportation, and telecommunications," Pru-Bache's Yardeni said. "But profits are not as disappointing as they appear to be for another reason.

"Because of liberalized depreciation rules, many firms have gone on a capital spending spree. But in reality, the expense of depreciation has been exaggerated. From the point of view of real hard dollars, real cash and corporate cash flow, things have never been better."

Yardeni said unseasonably warm weather has hurt demand for winter clothing. But utilities have benefitted from the warm weather and mild inflation since fuel costs have been relatively low, Yardeni said.

While several oil companies were on the list of the nation's most profitable businesses in the third quarter, oil profits were hurt by a decline in energy prices during the quarter and by the strong dollar.