Sharp increases in the costs of food, energy and apparel pushed consumer prices in the Washington area up another 1.9 per cent in the last two months, leaving area residents with a dollar worth less than half of what it was a decade ago.
But as an informal survey of local businessmen and economists indicates yesterday, most consumers are dealing with the phenomenon by spending more, working more, cutting some corners and generally managing still to live relatively well.
Indeed, many people appear to have adopted an inflationary way of life-borrowing heavily, saving little and buying property and other tangible goods as a way to cope with the falling value of their dollars.
"I think the psychology is that [people] are paying so much more for everything, they don't look on money as a valuable commodity any more," said Lee Palmer, the owner of the Old Club Restaurant in Alexandria.
"People have become accustomed to inflation," said Thomas Owen, president of Perpetual Federal Savings and Loan. "They would rather spend today than buy at a more expensive [price] in the future."
Over the last 12 months, the Labor Department said price increases here averaged 11.3 percent, the steepest rise since 1974.
Although the price increase for the last two months was slightly less than the 2.4 percent in December and January, the department reported that Washington's consumer price index stood at 212.6 in March, meaning that the same goods and services that cost $100 in 1967 now cost $212.60.
The price increases have been pervasive, the Labor Department said, but the biggest increases here in February and March were heating fuel, up 6.6 percent; appeal, 6.2 percent; groceries, 3.6 percent, and medical care, 2.4 percent.
Meanwhile, Washington's savings and loan associations reported a net loss of funds during 1978 while consumer installment debt-on credit cards, auto loans, and retail charge accounts-rose steeply.
One bellwether in the inflation surge has been the price of beef. The Labor Department said beff prices rose 10.3 percent here in February and March and 37.3 percent since March 1978.
Over the last year, the price of ground beef has risen 48.6 percent, the department said. The price of surloin climbed 53.2 percent, but middle-range cuts increased somewhat less.
Safeway, the largest supermarket chain in the area, reported that destpite the price increases the amount of beef it is selling has dropped only slightly. But Ernest Moore, a spokesman for the chain, said sales of round steak have increased while those of the more expensive porterhouse have declined.
However, at the Chevy Chase Supermarket in Chevy Chase Lake manager Simon Cregar said, "I've been here 13 years and I've seen no change [in people's buying habits]." Nearby one customer loaded up her cart with several packages of steak 1 1/2 inches thick. The price was more than $4 a pound.
According to the U.S. Census Bureau, average family income is staying about even with inflation, though actual buying power has not increased since 1972. Because of rising taxes, disposable income after taxes has declined slightly.
The pattern is in sharp contrast to the 1950s and 1960s when inflation was low and real income rose steadily.
Despite the stagnation of the 1970s, the Washington metropolitan area continues to have the highest median family income in the country. In 1977, the latest year for which census data is available, families here earned an average of $22,366, compared to the national average of $16,009.
Census officials said the income gains have resulted partly from the increasing number of well-to-do families in which both wives and husbands hold paying jobs. meanwhile, because of a sharp increase in divorce, farmore families now are headed by working women with low-payings jobs.
Even though the population of the area has virtually stopped growing, the number of people employed continues to climb. in January, total employment in the metropolitan area reached almost 1.5 million - about 3.5 percent greater than a year earlier, according to the D.C. labor Department. The unemployment rate decreased from 5.1percent to 4.8 percent.
The number of families on welfare was down throughout the area.
Of the recent price increases, those with some of the widest impact have been in gasoline and home heating oil, which are tied to prices set by the Organization of Petroleum Exporting Countries (OPEC), the international oil cartel.
According to the American Automobile Association, gasoline prices in the Washington area now are rising at an annual rate of 26 percent, but the prices apparently have not led to any decrease in driving.
A spokesman for the AAA said requests for vacation map routings have increased this year by 2 to 3 percent. "It means that people are still driving" the spokesman said.
According to Steuart Petroleum Co., a ga llon of No. 2 home heating oil, which sold for 48 cents a gallon in November, now sells for between 50 and 63 cents.
Besides spending and borrowing, people are trying to cope with inflation by changing some of their purchasing patterns.
"We buy whatever is on sale, and I don't need to eat beef at $3 a pound."
His wife, Boceil, said she clipped newspaper coupons for discounts, but even so, she said, "I think the prices are ridiculous. I'm not going to but paper towels, even with this coupon, for 98 cents."
I've done everything with chicken except dance with it." said one shopper at the Georgetown Safway who asked that she be identified only as "an upper middle-class housewife" who lives on Klingle Road NW. "Everytime my husband sees chicken he gets the shakes."
Despite her efforts at economizing, the worman said she spends "a minimum of $150 on groceries, buying mostly fresh vegetables . . . I'm really heavy on peanut butter and jelly now to keep them from hitting the cookie jar. I don't see how people in the poorer sections of town are making it."
There is an erratic pattern involving goods and services which soem people continue buting and otheres defer.
A hairdresser at one beauty shop in Arlington, for example, said customers "seem to be waiting longer, to save up between stylings or get just a shampoo instead of shampoo and cut."
But Gart Hanlin, at Marcel of Bethesda, said bussiness is good.
The lower and middle classes are more likely to spend the money than the upper class," Hanlin remarked. "They are also much better tippers.
Jacob Krampf, a specialist in treating gum diseases, said he has not experience a decrease in patients at his offices in Montgomery Village and Silver Spring, even though periodontal surgery might be viewed as something that could skipped or postponed. Krampf said few of hos patients have insurance to cover the treatments he gives.
But one orthodontist, a specialist in straightening teeth, said over the past two or three years there has been a significant decline in the number of patients having work done in his specialty.
The reason for the decline, he said,is "principally economic," but he added is "principally economic," but he added: "The metropolitan areas are over-supplied with orthodontists."
At the Kennedy Center the price of orchestra seats has reached$16 for plays and $19.50 for operas. Even in the second balcony tickets cost $14 apiece for the New York City Opera, which starts a two-week run next Tuesday.
A spokesman for the Center said the high prices have not cut attendance.
Apparently, if the public wants it, they'll pay for it," the spokesman said. "we've benn watching this aspect for a couple of years and there's been no noticeable resistance."
Also contributing to this story were staff writers Phil Mccombs, Thomas Morgan, Kathy Sawyer, Patrick Tyler, Janis Johnson, Thomas Grubisich, Athelia Knight and Lewis M. Simons. CAPTION: Graph, no caption, The Washington Post.