Consumer Prices Rise 0.2%, Hold 1984 Inflation to 4% : Last Three Years Are Best Period Since Late 1960s

Consumer prices went up just 0.2% in December, giving all of 1984 an inflation rate of 4% and making the last three years the best price performance period since the late 1960s, the Labor Department said today.

(In Los Angeles, a 0.2% price decline in December brought the full-year inflation rate to 4.5%.)

Rare pre-Christmas sales drove clothing prices nationwide down 0.3% in December while gasoline, fuel oil and natural gas prices also dropped. Over the last year, gasoline has fallen 2.5%.

Last year fulfilled the best hopes of economists by nearly duplicating the modest inflation rates of 3.8% in 1983 and 3.9% in 1982. Best of all, energy prices were less of a factor in each year as more and more price categories showed only moderate acceleration.

Inflation ‘Frozen’ White House spokesman Larry Speakes said the numbers show that “inflation at the check-out counter remains low and under control.” With the record of the last three years the best since 1966-68, Speakes said, “We have frozen inflation in place.”

As recently as 1980 the inflation rate was a double-digit 12.9%.

Even hospital room charges, one of the most stubborn categories, showed its best performance since 1973, rising 7.4% in 1984.

Analysts say the first half of this year could be better still, part of the continuing moderating trend that made the inflation rate for October, November and December just 3.1%, when figured yearly.

Prices consumers paid at retail went up 12.1% in 1982, 1983 and 1984, the best three-year performance since the 11.5% for 1966 through 1968, department analysts said.

Energy Prices Decline Energy prices contributed to the 1984 result by declining 1.9%. But that was not as big as their 3.2% decline in 1983 nor the 5% drop in 1982.

By the end of last year the 1967 dollar was worth 31.7 cents, having lost exactly a penny’s worth of purchasing power in 12 months.

An exception to the moderate price increases last year was local telephone service. Because of the price hikes imposed by local operating companies after separating themselves from AT&T;, the cost of telephone service skyrocketed a record 17.1% during the year, the department said.

Food and beverage prices went up 0.3% in December. Beef and pork advanced substantially more in December than in earlier months. Beef was up 3.8% for the year and pork gained 6%. Both had declined in 1983.

Fresh fruit prices climbed 22.6% in 1984 and consumers can expect even worse price increases this year, now that a freeze even worse than the December, 1983, chill, has hit the citrus belt.

Housing prices were up only 0.1% in December and 4.2% for the entire year.

Transportation costs also rose a scant 0.1% and over the year rose less than the overall average, just 3.1%.

Overall medical care costs went up 0.3% in December and were up 6.1% for the year, tying a miscellaneous listing that includes school tuitions for the biggest annual increases among seven major categories.