8-Month Retail Price Rise Smallest Since ’55

Consumer prices rose 0.2% in August as higher prices for food and clothing offset fresh declines in gasoline costs, the government said today.

Even with the slight jump, which followed a month of flat prices, consumer costs have risen at an annual rate of just 0.1% this year, the best January-August performance since 1955.

Although energy prices in those eight months have fallen at an annual rate of 25.8%, all other retail prices, lumped together, have risen at a 3.7% rate.

Prices had fallen 0.2% through July.

For all of 1986, analysts continue to predict that consumer prices will rise by 2% or less, well below the 3.8% increase of 1985 and the best inflation performance in more than two decades.

At the White House, President Reagan’s chief economic adviser, Beryl F. Sprinkel, said, “We do expect that the inflation rate is going to ooze up in the months ahead.”

‘Modest Increases’

Sprinkel predicted “modest increases in the inflation rate, somewhere in the 3% to 3.5% range,” over the next year as oil prices recover from their tailspin and the economy absorbs the effect of the depreciation of the dollar.

As for August, the Labor Department’s consumer price index said gasoline prices fell 4.7%, a moderation from July’s 6.6% decline.

That moderation came after the 13-member Organization of Petroleum Exporting Countries agreed to cut production in an effort to boost crude oil prices.

International crude prices have risen about $1 a barrel in the last month, but that increase has not yet filtered through to the gas pump.

Food prices rose 0.9% in August after a 0.8% increase in July. That increase was caused primarily by sharp advances in meat, poultry and egg prices.

Winter Clothing Prices

Clothing prices gained 0.7%, their largest advance of the year. Higher-priced fall and winter merchandise, particularly women’s and children’s clothing, was primarily responsible, the department said.

Analysts also note that imported clothing prices are rising as the value of the dollar eases downward.

The cost of medical care, the fastest rising component of the index over the last year, was up 0.6% in August. Over the last 12 months, medical care costs have risen 7.6%.

Textbook and school supply prices have risen 8.9% over the last year.

Although analysts predicted that the January-July price deflation will not continue, they also said that recent fears of rapid inflation as reflected on the stock and bond markets are overblown.