Prices of goods ready for sale at retail shot up another 1.3 percent last month, mostly because of the largest one-month increase in food prices since 1974, the Labor Department reported yesterday.
The food index, which rose 2.6 percent, was led by a 21.5 percent increase in the cost of processed poultry, and lesser increases for beef, veal, pork and eggs, the department said. These increases should show up soon in supermarkets.
The producer price index for finished goods -- formerly part of the wholesale price index -- has risen 12.8 percent in the last 12 months.
The bad news on inflation was accompanied by a further sign that the economy may be in a recession as well.
"A Department of Commerce survey of business intentions to invest in new plant and equipment showed American companies plan to spend only 1.5 percent more, ater adjustment for inflation, in the first half of 1980 than they expect to spend in the second half of this year.
Commerce economist Adrian Cooper said the 1.5 percent increase, while small, "is still encouraging in light of the expected economic decline during the same period."
However, business investment plans are often trimmed once a recession begins in earnest, and if the recession is deeper than expected, businessmen "could change their minds very quickly," Cooper said.
Though November food prices soared, there were some encouraging signs elsewhere in the finished-goods price index, and in the separate indexes for intermediate goods and for crude goods.
Finished goods other than foods rose only 0.8 percent, the smallest increase since November 1978.
Home heating oil prices rose only 0.1 percent, compared to 4.7 percent in October. Gasoline went up 3.4 percent compared to 5.1 percent the previous month. But experts think energy prices will pick up again in the near future as exporting countries raise the world price of oil and the administration continues to phase out price controls in this country.
New car prices rose only 0.2 percent in November, and prices for household flatware dropped 1.7 percent after a whopping 39.1 percent jump in October. Prices for prescription drugs fell 0.9 percent, the department said.
With the slower increase in energy prices, non-durable finished goods rose 1.1 percent in November. Except for February's 0.9 percent, that was their smallest increase this year.
The index for intermediate goods -- materials such as steel products still to be fabricated into finished goods-- rose only 0.9 percent in November, matching the smallest increase this year. The rise was only half as large as October's.
Price increases for manufacturing and construction materials showed significantly, as did the increases for energy products. Precious-metals prices fell after sharp gains in September and October, and lead and zinc prices dropped, too.
Several other prices very sensitive to changes in demand also declined, including those for leather and inedible fats and oils.
The index for crude materials rose 2 percent in November, more than October's 1.5 percent, primarily because of higher costs for poultry, hogs and wheat.
The survey of investment intentions showed that businessmen plan to spend at an annual rate of $192.5 billion in the first half of 1980, compared with $176.4 billion during 1979.
Manufacturing industries plan the largest increases according to the survey.
Within that sector, durable-goods producers, led by machinery and nonferrous metals, plan to step up outlays by 8.5 percent.
Among non-durable, goods industries, the paper and petroleum industries expect the largest increases. Among non-manfacturers, large increases are shown for air transportation, gas utilities and commercial groups.
In another development yesterday, the National Association of Purchasing Management reported that 71 percent of its members -- executives in charge of buying materials for industry -- believe the nation will experience only a mild recession in 1980.
"We're saying that the downturn is not going to be too severe," saidd Charles Haffey, vice president of purchasing at Pfizer Inc. and chairman of the survey committee. "It will be mild and will be over by the summer of 1980." They also expect inflation to moderate next year.
On the other hand, the executives were pessimistic about the current Christmas season. Only 16 percent think retail business in their hometowns will be better than last year, while 35 percent say it will be worse.
"This is one of the most pessimistic reports about retail Christmas sales we've ever seen." Haffey said.