Food, Cars Set Pace for Rise in Prices : Increase of 0.3% in October Breaks Five-Month Pattern

Rising food and automobile costs sent consumer prices up 0.3% in October, the government said today, breaking a string of five consecutive 0.2% monthly increases.

(Consumer prices in Los Angeles and Orange counties rose 0.7% in October after remaining stable in September, the Labor Department reported. October’s advance was attributed to higher residential rents and automobile insurance rates, price increases for home furnishings and the recently levied federal tax on alcoholic beverages.)

Even with the gain in the national Consumer Price Index last month, retail prices have risen at an annual rate of just 3.3% so far in 1985 and analysts--anticipating the October spurt--cautioned against reading too much into today’s report.

Temporary Condition

Donald Ratajczak of Georgia State University, head of an economic forecasting project that specializes in wholesale and retail price inflation, said, “The acceleration in inflationary pressures appears to be temporary and should become subdued again early in 1986.”

But David Ernst of Evans Economics Inc., a private Washington forecasting firm, predicted that the pattern of increase for the next few months was likely to continue on the order of 0.3%.

Food prices nationwide, including restaurant meals and alcoholic beverages, rose 0.4% in October, compared to a 0.3% increase the previous month.

The transportation component rose 0.2% after declining for five straight months. The Labor Department said that the increase came mostly because of higher automobile finance charges and insurance costs along with price hikes for 1986 models. Those increases more than offset fresh declines in gasoline prices.

Slowest Since 1967

The annual rate increase of 3.3% for the first 10 months of 1985 is still the slowest pace since 1967, when consumer prices rose 3%. The October index was 3.2% above the same month a year ago.

Retail prices rose 4% in 1984, 3.8% in 1983 and 3.9% in 1982.

The department provided these additional details on consumer price activity for October, all adjusted for normal seasonal variations:

--A sharp 3% increase in alcoholic beverage prices, due to an average $2 per gallon hike in the federal excise tax for distilled spirits on Oct. 1, was mostly responsible for the sharper increase in overall food and beverage prices, which had risen just 0.3% in September.

--Automobile finance charges rose 1.9% after 10 straight months of declines. Insurance costs rose a matching 1.9%, mostly a reflection of higher prices for 1986 model cars. New car prices themselves rose 0.5% after a 0.3% rise in September, while used car prices registered their seventh consecutive decline, down 0.6%.

--Gasoline prices were down 0.8% for the fourth straight month.

--Housing costs rose 0.3%, including 0.4% for homeowners and 0.8% for renters.