With beef prices again leading the way, the consumer price index jumped 0.9 percent in April, the biggest rise since February 1977 and the fourth substantial increase in as many months, the government reported yesterday.
Beef prices jumped a record 6.6 percent, accounting for more than a third of the 2.4 percent rise in grocery prices. Fresh vegetables prices soared 9.7 percent, the Labor Department said.
Administration officials had anticipated a sizable increase in the index, but Robert S. Strauss, President Carter's top inflation fighter, said nonetheless that the report "underscores the need to attack inflation across a very, very broad front."
Consumer prices over the past three months have risen at a seasonally adjusted annual rate of 10 percent, and the April increase, if compounded for a full year, would work out to a rate of 11.4 percent.
Strauss told reporters the president plans tofight hard in Congress for a bill designed to hold down rising hospital costs and said the administration is considering a variety of options, including an increase in quotas, to help relieve pressure on beef prices.
Beef prices have been climbing at a seasonally adjusted annual rate of 68.6 percent since February as cattlemen continue to thin out their herds. That process began late last year.
Strauss noted that cattlemen had suffered huge losses in the past few years, but said beef prices had "gone up too fast and too far" in recent months.
Carter's economic advisers expect the rapid increase in food prices to moderate over the next two months and predict that the overall inflation rate for the year will be about 7 percent.
The whopping increase in vegetable prices in April was triggered in part by a 30 percent rise in the price of lettuce. Since the April measurements were made, some vegetable prices have begun to decline.
But the Agriculture Department reported yesterday that the prices farmers received for the grains last month rose 2 percent and that their prices for vegetables increased 5 percent, an indicator that food inflation may not be tempered soon.
The administration had been braced for yesterday's bad news on the price front. Strauss said the 0.9 percent rise in consumer prices was about the "mean average of what we expected."
At the same time, the Labor Department reported that prices in April rose more rapidly than wages. The purchasing power of an hour's work fell 0.1 percent, but was still 1.6 percent greater than in April 1977.
More disconcerting news is expected Friday when the Labor Department reports its May wholesale price index.
Even if food prices moderate this summer and fall as administration officials expect, Barry Bosworth, director of the Council on Wage and Price Stability, had noted that the sharp increases in the consumer price index will soon begin to show up in cost of living adjustments in labor contracts.
That will raise labor costs across the economy and put pressure on businessmen to raise their prices. Labor accounts for about 75 percent of the cost of production in the United States.
Mainly because food prices, including beef, behaved moderately in late 1977, food prices are only 8.5 percent higher than in April 1977, although beef prices are 19 percent higher.
The consumer price index, which is not adjusted for seasonal variation, was 191.5 percent of its 1967 average in April, which means that a selection of goods and services that cost $10 in 1967 cost $19.15 in April.
Although food prices rose far faster than prices in general, most other spending categories increased in April as well.
The cost of owning and maintaining a home increased 1.7 percent, clothing costs rose 1 percent, and medical care prices increased 0.7 percent. Gas and electricity prices increased 1.5 percent, while fuel prices rose 0.9 percent.
Transportation costs rose only 0.2 percent, mainly because declining automobile insurance rates offset an increase in gasoline prices and new and used car prices rose moderately.