Consumer prices rose 0.2 percent in November, the smallest monthly increase since June, as weak worldwide demand for oil continued to restrain inflation, the government said yesterday.
So far this year, inflation as measured by the consumer price index is running at a 4.1 percent rate, compared with 3.8 percent for all of 1983, the Labor Department said. Few economists see inflation resurging beyond 5 percent any time soon.
White House spokesman Larry Speakes pointed to the progress against inflation during President Reagan's first term, which saw the rate drop from a 1980 average of 12.4 percent to 8.9 percent in 1981, 3.9 percent in 1982 and 3.8 percent in 1983.
"This year is on the same track. We've nailed inflation, and it's the American consumer who has reaped the benefits," Speakes said.
"I don't know that we've nailed" inflation, said Steven Wood, an economist for Chase Econometrics, noting that inflation levels are not back to the 1 percent to 2 percent rates experienced in the 1950s and early 1960s. But he said, "I think we've nailed the possibility of the acceleration of inflation in the next few years."
The consumer price index, unadjusted for seasonal factors, was 315.3 in November, the same as in October. That means that goods costing $100 in 1967 cost $315.30 last month. Another index, for urban wage earners and clerical workers, was 311.9, down from 312.2 in October. This index is used for indexing Social Security and other federal payments and often is used as an escalator in collective bargaining agreements.
Gasoline prices rose much less than they did in October, and new- and used-car prices declined, the Labor Department said. Food and beverage costs also rose only slightly, and price-cutting by retailers to generate higher Christmas sales pushed down apparel costs, the first decline since June.
However, the indexes for housing, entertainment and other goods and services rose slightly more than they did in October, the Labor Department said.
Meanwhile, the Commerce Department reported that U.S. businesses plan to increase spending on plant and equipment next year by 6.8 percent, compared with 13.3 percent for this year. A slowdown in capital spending is normal during the third year of an economic recovery.
The current slackening in economic activity has been a major reason that inflation did not accelerate this year. Another reason has been declining oil prices resulting from the worldwide glut.
Although the ministers of the Organization of Petroleum Exporting Countries yesterday agreed to maintain set prices and output quotas, oil analysts expect those guidelines to be violated because oil exporting countries need revenue. The analysts said they do not expect oil prices to be a significant factor in inflation for the foreseeable future.
Additionally, the increasing value of the dollar has helped make imports cheaper, putting pressure on prices of competing American-made goods.
A new factor in the inflation picture is that consumers are beginning to anticipate slower price increases than the nation experienced from the middle 1970s until 1981, Wood said. Therefore, they are not feeding inflation by hoarding goods in the expectation that prices will surge. Such hoarding often leads to increased demand, shortages and price increases.
Furthermore, factories are not working at full capacity -- removing the possibility shortages will stimulate inflation -- and wage demands are still relatively low. In addition, the Federal Reserve Board, despite a slightly looser monetary policy, has been a staunch anti-inflation watchdog.
"Inflation continues to do very well, in very sharp contrast to widespread fears expressed early in the year that inflation would be sharply higher," said Robert Ortner, the Commerce Department's chief economist. "Those fears were greatly exaggerated."
Gasoline prices rose 0.4 percent in November following a 1.8 percent increase in October. Gasoline prices are 1.8 percent lower than they were at the end of last year and 12.6 percent below their peak in March 1981, the Labor Department said.
New-car prices declined 0.3 percent and costs of used cars fell 0.7 percent, the fourth decline in the last five months, Labor said.
Grocery store food prices rose 0.1 percent, compared with a 0.4 percent increase in October. However, fruit and vegetable prices rose 0.7 percent following a 1.4 percent rise in October.
The index for meats, poultry, fish and eggs declined 0.2 percent although beef prices rose moderately, Labor said. Dairy costs rose 0.4 percent after increases of 0.9 percent and 0.5 percent in the previous two months.
Housing costs rose 0.3 percent following a 0.1 percent rise in October. Fuel and utilities costs rose 0.2 percent after a 0.8 percent decline in October. Telephone service rose 0.6 percent. The cost of renting shelter rose 0.4 percent, and that for homeowners increased 0.3 percent.