Consumer prices rose a full 1 percent for the third month in a row last month, with housing, transportation and food costs accounting for virtually all of the increase, the Labor Department reported yesterday.
At the same time, new government estimates indicated the economy has snapped back from last spring's recession faster than experts thought it would. First internal estimates by the Commerce Department of the economy's performance this quarter show it growing a healthy annual rate of nearly 4 percent after adjustment for inflation, sources said. Officially, Commerce also revised its third-quarter figures for gross national product, estimating that it expanded at a 2.4 percent annual rate instead of the 0.9 percent calcuated earlier.
These signs of a growing but highly inflationary economy were released as other evidence mounted that interest rates may have peaked. A cut in the prime lending rate from 21 1/2 percent to 20 1/2 percent, initiated by Wells Fargo Bank on Monday, spread to several other major banks yesterday, including the nation's third largest, Chase Manhattan.
A number of economic forecasters believe the high interest rates in recent months have so hurt the economy, particularly the housing and auto sectors, that a recession or at least no real growth is likely in the first half of next year. But if interest rates now come down, less damage will be done.
With the November increase, the consumer price index is up 12.6 percent in the last 12 months, which is equal exactly to a rate of 1 percent a month. In the Washington area the CPI rose 1.8 percent between September and November, slightly less than nationally, the Labor Department said. [Details on Page C5].
But the average worker stayed even with last month's inflation; wages rose the same as prices. The hourly earnings index, which covers most workers on private payrolls, went up the same 1 percent as the CPI. Over the year, however, the earnings index fell 2.6 percentage points behind the inflation rate.
Meanwhile, economist Martin Anderson, named yesterday as President-elect Ronald Reagan's assistant for policy development, predicted that under the new adminstration "you will see rates of inflation begin to go down." But he cautioned that there is "no magic wand you can wave to cure inflation."
Separately, Edwin Meese III, Reagan's top adviser, said the incoming administration is no longer considering declaring an economic emergency in any legal sense. On the other hand, "The idea of focusing attention through a variety of means on kind of an urgency basis, which some would classify as an emergency basis, particularly focusing congressional attention, on the economic problems is being considered," he said.
"The exact format, the exact language, the exact terminology has not been decided on," Meese continued. "We have a working task force that is developing the specific economic plan" that Reagan will propose "soon after the inauguration."
Carter administration officials, including Treasury Secretary G. William Miller and Charles L. Schuitze, chairman of the Council of Economics Advisers, have disputed assertions by some Reagan advisers that the country faces an economic emergency. Claims that it does, they argued, could make current conditions worse, particularly in the strained financial markets.
Meese went on to say there is a possibility Reagan will meet "with various people" to discuss economic matters during the first two weeks of January when Reagan will be in Washington. "It's possible the Federal Reserve Board could be included in that," he added.
However, Reagan's own economic team will not be complete before next month. Meese said selection of a CEA chairman has been put off until after the first of the year.
In November, home financing costs rose 3.9 percent, reflecting increases of 2.7 percent in mortgage interest rates and 0.7 percent in house prices, the Labor Department said. If mortgage interest costs were excluded, the CPI would have risen 0.8 percent instead of 1 percent last month, and 11.2 percent in the last year instead of 12.6 percent.
Food and beverage prices rose 1.1 percent last month, more than October's 0.7 percent increase but less than the 1.7 percent and 1.6 percent jumps of the two previous months. Sugar and sweets rose the most, 3.3 percent, but cereals and bakery products, dairy products and nonalcoholic beverages all rose 1 percent or more.
Over the year, sugar and sweets are up an extraordinary 34.6 percent. All food bought in stores for consumption at home is up 11.1 percent, and Agriculture Department economists say it could rise as much as 13 percent in 1981.
Transportation costs rose 1.3 percent last month, largely because of a 5.1 percent increases in used car prices and a resumption of increases in gasoline prices, which went up 0.9 percent. It was the third consecutive month used car prices rose more than 5 percent, probably reflecting consumer reluctance to buy expensive new 1981 model cars.
Clothing remained the relative bargain in the marketbasket of goods prices each month for calculating the CPI. Apparel prices rose only 0.2 percent in November and Only 6.8 percent in the last 12 months.
Overall, the price index rose last month to 256.2, which means that goods and services it cost $10 to buy in 1967 now cost $25.62.
The Commerce Department's revised figures for GNP generally indicate that economic growth in recent years has been greater than previously estimated, with more saving and investment and higher corporate profits than previously reported.
The new numbers, for instance, show that real output rose 3.2 percent in 1979 instead of 2.3 percent. In the first quarter of 1980, growth was at a 3.1 percent annual rate instead of a 1.2 percent rate. The huge decline in the second quarter, however, is now said to have been at a 9.9 percent rate instead of 9.6 percent.