Prices Level Off With Only 0.2% Rise in October

Consumer prices rose 0.2% last month as higher new car prices offset a dip in gasoline prices, the government reported today.

The increase in the Labor Department’s Consumer Price Index followed a 0.3% rise in September and meant that over the last 12 months, prices have risen at an annual rate of 1.5%.

(In Los Angeles and Orange counties, the government’s Consumer Price Index rose 0.5% in October, putting it 3.1% above the year-earlier level. The October rise was a substantial slowdown from September, when prices in the region soared 1.1%.)

In another report, the Commerce Department said durable-goods factory orders fell 6% last month, the steepest decline in more than two years.

Slump in Military Orders

That report said half the drop was the result of a steep 43.1% slump in orders for military equipment. Analysts, however, said the weakness was widespread across a variety of industry segments.

The October National Price Increase, which is seasonally adjusted, would amount to an annual inflation rate of 1.8% if last month’s rate held for 12 months.

For all of 1985, consumer prices advanced 3.8%. Analysts expect this year’s increase, once the November and December figures are added to the tabulation, to be about 1.7%.

While this would be the lowest inflation rate since a 1.2% rate in 1964, analysts said they expect inflation to rise to 4% or more in 1987 now that the precipitous drop in world oil prices has run its course.

Gasoline prices fell 2.4% in October and new automobile prices rose 0.8%.