In another sign that the economic expansion has paused, new orders for durable goods from American manufacturers fell 4.1 percent in October, the Commerce Department reported yesterday.
Meanwhile, the Labor Department said that a 1.8 percent increase in gasoline prices helped boost the consumer price index by 0.4 percent in October, the same as in September and close to the average for the first 10 months of the year.
The decline in new orders, the largest since April, was widespread among different types of these long-lasting products. New orders, which indicate future production levels, have fallen now in four of the last five months to reach $94.6 billion, a level below where they were a year ago, the department said.
Continued weakness in orders would "signal a further slowdown in the economy," said Robert Ortner, the Commerce's Department's chief economist.
The gross national product, adjusted for inflation, grew at a seasonally adjusted annual rate of only 1.9 percent in the third quarter, down sharply from a 7.1 percent rate in the spring. A number of economic forecasters expect a figure close to 2 percent for the current three months, but a growing minority believes the nation has entered another recession period in which GNP will decline.
The data on new orders also underscores the impact of the rising trade deficit on production of U.S. goods. Total demand for goods apparently is still going up, but an increasing share is being supplied by foreign producers. Imports of all types of goods, both durable and nondurable, rose at a 55 percent annual rate in the third quarter while exports went up at only an 8 percent rate, according to the Commerce Department's GNP report released Tuesday.
New orders for non-defense capital goods, an indicator of future levels of business investment, fell 11 percent or $3.1 billion to a level of $24.8 billion, their lowest level since last November.
With the October increase in the CPI, the index was 4.2 percent higher than it was a year earlier. In the last three months, it has risen at a seasonally adjusted annual rate of 4.7 percent. Not seasonally adjusted, the index reached 312.2, meaning that the fixed market basket of goods and services on which the CPI is based now costs 3.122 times as much as it did in 1967.
Grocery store prices, like the overall index, rose 0.4 percent, with fresh fruits and vegetables responsible for a substantial part of the rise. Their prices went up 1.4 percent. Grocery store prices had dropped 0.3 percent in September after rising a strong 0.8 percent in August. They are up 3.9 percent in the past year, the department said.
The housing component of the index increased only 0.1 percent, following a 0.4 percent rise in September and even larger increases the previous two months. Prices of fuels and utilities, which had gone up sharply during the third quarter, fell 1.3 percent and 1.7 percent, respectively.
The cost of medical care rose 0.5 percent in October and was up 6.2 percent in the past year.
In general, the prices of services, which are less likely to encounter foreign competition, are up more than 6 percent in the past year, while commodity prices are up only 2.9 percent.
Even though new orders for durables declined in October, shipments rose slightly to a level of $99.3 billion. This meant that the level of unfilled orders fell for the second month in a row to a level of $344.1 billion. That was the lowest level since February.
In a separate report, the Labor Department also said that a combination of rising consumer prices and falling average weekly earnings caused real average weekly earnings to decline 0.9 percent in October.
Since October 1983, average weekly earnings are up 2.6 percent as a result of a 3.2 percent increase in average hourly earnings and a drop of 0.6 percent in average weekly hours worked.
According to another version of the CPI based on spending by urban wage earners and clerical workers, consumer prices rose 3.6 percent during the latest 12 months. Comparing that to the 2.6 percent rise in average weekly earnings shows the 1 percent decline in real average weekly earnings.
For October, average hourly earnings of non-supervisory workers on business payrolls other than on farms were $8.40. Average weekly earnings were $294.84.