Surge in Prices Brings Warning of Stagflation : Economy: Consumer index up 0.8% in month as fuel costs jump 4.3%. Trade deficit rises to $9.3 billion.

The pace of inflation accelerated sharply last month, the government reported Tuesday, providing the first taste of what economists warn will be several more months of higher-than-usual inflation figures stemming from the Persian Gulf crisis.

The Labor Department’s monthly report showed that consumer prices jumped a seasonally adjusted 0.8% in August, double the increase that was posted in July, and the largest monthly surge since January. Energy prices jumped 4.3% during the period, the biggest increase since January, when they rose 5.1%.

In a separate dose of bad news, the Commerce Department reported that, largely because of a sharp drop in exports, the nation’s foreign trade deficit mushroomed to $9.3 billion in July, its highest level since January. The deficit had declined to $5.3 billion in June.

Allen Sinai, economist for the Boston Co. Economic Advisers Inc., a New York economic consulting group, said that, taken together, the reports raise disturbing memories of 1970s-style stagflation--continuing high inflation combined with very slow growth.

“Stagflation is now besetting the U.S. economy,” Sinai said. “It looks more and more that, post-Iraq, the recession (that) the economy has moved into may be worse and inflation may be higher.”

Some analysts had hoped that the export boom evident earlier this year would keep the economy out of recession, but the July trade report may dash that hope. The document said that exports, which hit a record $34.3 billion in June, fell 6.4% in July to just over $32 billion.

Imports jumped 4.5% to $41.3 billion.

At the same time, the fast rise in consumer prices--coming on the heels of a 1.3% jump in wholesale prices in August--brings the economy to the brink of double-digit inflation, a virtually sure prescription for a recession.

The 4.3% increase in energy prices was reflected throughout that sector of the economy. Gasoline prices jumped 7.6%, and prices of fuel oil surged by 15.4%. Even sharper increases are expected in coming months.

More ominous, economists said, is the fact that higher inflation was reported in parts of the economy not directly affected by energy prices, such as medical care, many services and the cost of shelter--up 0.9%, 0.7% and 0.7% respectively.

Sinai, in particular, was pessimistic. “To go into an energy inflation, with a 5.5% annual inflation rate underlying that, suggests we’ll get to 6% or 7% (inflation) during the next year,” he said. “We could very well get double-digit annual rates in the next few months.”

Giulio Martini, an economist with Sanford C. Bernstein & Co., another economic consulting firm, agreed. “This is resolutely bearish news,” he said. “There’s a real danger we are looking at a situation that is more and more like 1979.”

“These trade figures raise a concern about a bigger recession than we feared,” Sinai said. “Trade had been expected to be a prop . . . while non-oil imports were expected to decline. But this report suggests the opposite happened.”

Commerce Secretary Robert A. Mosbacher warned in a statement that the recent rise in oil prices is likely to add about $2 billion a month to the trade deficit. He said that the non-oil part of the deficit--a better indicator of competitiveness--would continue to decline.

The overall drop in exports was pervasive. Shipments of U.S.-made capital goods fell $700 million over the month, including $400 million in aircraft alone. Exports of autos and parts declined by $400 million. Even food exports fell, by $600 million.

At the same time, imports rose virtually across the board, including $300 million in extra oil imports. The imports reflected crude oil prices of $14.50 a barrel--less than half the spot market prices currently quoted in the wake of the Persian Gulf crisis.

One worrisome sign is that the U.S. trade balance with Western Europe--the best market for U.S. capital goods and high-tech products--turned sharply from a surplus of $806 million in June to a deficit of $1.3 billion a month later.

David Wyss, economist for DRI/McGraw Hill, a Lexington, Mass., economic forecasting firm, noted that Canada, the largest single U.S. trading partner, is already in recession--and the deficit with Canada widened slightly in July from $700 million to just under $1 billion.

In the inflation report, the Labor Department said that consumer prices in the Los Angeles-Anaheim-Long Beach metropolitan area rose 0.5% in August before seasonal adjustment, compared to an unadjusted 0.9% increase nationwide.

Tuesday’s figures brought the overall consumer price index to 131.6% of its level of 1982-84, meaning that it cost $131.60 last month to buy the same goods and services at retail that cost $100 just seven years ago.

PAYING THE PRICE Energy Prices Soar How elements of the energy index fared in August: Fuel oil: +15.4% Other household fuels: +4.4% Electricity: N.C. Utility piped gas: N.C. Gasoline: +7.6% Other motor fuels: +0.5%