Consumer Prices Up Modest 0.3% in Nov. : Increase in Cost of Energy Expected to Be Short-Lived

Consumer prices rose a moderate 0.3% in November as energy prices moved upward after two months of declines, the government said today.

With just one month to go in 1987, inflation at the retail level was running at an annual rate of 4.7% for the year--more than four times the tiny 1.1% increase of 1986 but still in the range considered moderate by most economists.

The November rise in the Labor Department’s consumer price index followed a 0.4% increase in October.

Analysts suggested the rise in energy prices might be short-lived, however. The figures released today did not reflect this week’s dissension among members of the Organization of Petroleum Exporting Countries, which failed to lower production quotas and left the nominal price of oil at $18 a barrel.

Many analysts, however, expect prices to stabilize at $16 a barrel or less because of overproduction. That could even produce price deflation, rather than inflation, early next year, some said.

Overall energy costs rose 0.8% in November after a 0.9% drop in October and a 0.5% fall in September.

Seasonal Adjustments

Gasoline prices rose 0.3%, after falling 0.3% in the previous month. Home heating oil costs were up 0.5%; natural gas and electricity prices jumped 1.4%.

Department analyst Patrick Jackman said last month’s energy price rise was mostly the result of seasonal adjustments rather than actual increases. For instance, he said, gasoline prices are usually expected to fall in November. Before adjustment, those prices showed no change, translating into an increase once the seasonal-adjustment process is applied.

Food costs rose 0.1% after a 0.3% rise in October. Last month’s increase included a 6.8% surge in the price of vegetables, led by a 23.8% price rise in the cost of lettuce.

The rise in lettuce costs has been blamed on unusual weather and insect infestation in lettuce-growing regions of California and Arizona.

These increases were offset by a 1.9% drop in the price of fresh fruit and a 0.9% decline in the combined cost of meats, poultry, fish and eggs.

Minus the usually volatile food and energy categories, the index for all other goods rose 0.3%, contrasted with a 0.5% increase in October.

Other Price Specifics

The overall November increase, if continued for 12 straight months, would amount to an annual price rise of 3.5%.

The Labor Department gave these other specifics of November price activity:

--New-automobile prices were up 0.4%. Used-auto prices were off 0.2%.

--Restaurant meal prices gained 0.2%; grocery store prices showed no change. Alcoholic beverage prices rose 0.4%.

--Housing expenses were up 0.3%.

--Service costs overall gained 0.3%. Medical care costs rose 0.4%.

The figures are adjusted to remove predictable seasonal price fluctuations.

The November increase left the overall consumer price index--which is not seasonally adjusted--at 345.8% of its 1967 base-period average.