Inflation slowed last month to an annual rate of just 3 percent, the government said today, as clothing prices fell for the first time since August and food prices stabilized for the first time since last February. The Labor Department said its Consumer Price Index, after seasonal adjustments, rose just 0.3 percent in November, compared with a 0.4 percent gain a month earlier. Before the seasonal adjustments, prices rose just 0.1 percent, the department said. The monthly inflation figure, rounded off in the announcement to 0.3, was actually 0.25, adding up to 3 percent annually. The new figures slowed the annual inflation rate from 4.6 per cent for the first 10 months of the year to 4.4 percent for the first 11 months. White House spokesman Marlin Fitzwater commented, ``Consumer price inflation appears to be moderating.'' He noted that inflation has been lower in the second half of the year than the first half. With only December left, another month similar to November could enable the Reagan Administration to finish its last year in office meeting its inflation target of 4.3 percent for 1988. The Commerce Department said today that the gross national product, the broadest measure of economic health, expanded at a moderate annual rate of 2.5 percent in the third quarter, held back by the summer drought. For the same period, the department reported that after-tax corporate profits rose 3.9 percent, down from a robust 8.9 percent increase the previous quarter. Food prices, which had risen at an annual rate of 10.9 percent from April through September because of the summer drought, were unchanged in November after rising only 0.2 percent in October, the Labor Department reported. Clothing prices that had jumped a total of 4 percent in September and October with the introduction of new back-to-school and fall fashions fell 0.3 percent last month. `Widespread promotional sales for footwear and women's and girl's clothing were largely responsible for the November decrease,'' the Labor Department said. Housing and shelter costs, including residential rents, rose another 0.3 percent, the same pace they have maintained over the past nine months. Natural gas and electric rates were up 1.8 percent and 0.1 percent, respectively, from October, more than offsetting a 2 percent drop in prices for more heavily purchased home heating oil, the government said. The November decrease was the sixth in a row for heating oil. Its price is now 10.8 percent below what it was last spring. Seasonally adjusted gasoline prices were unchanged from October but remain 0.2 percent less than they were at the end of last year and 28.1 percent below their peak level of March 1981. Excluding food, energy and shelter, consumer prices for other items rose an average 0.2 percent in November compared with a jump of 0.7 percent the previous month. The November increase raised the CPI to 120.3 from 120.2 in October, meaning that a marketbasket of goods costing $100 in a 1982-84 base period would have cost $120.30 last month. In November 1987, that same marketbasket would have cost $115.40. New car prices declined by 0.2 percent, reflecting the introduction of rebates on some of the new 1989 models after rising by more than a full percentage point in September and October. However, auto financing and insurance costs continued to advance dramatically, with the former up 1.5 percent and the latter 0.9 percent above October. Airline fares also jumped a dramatic 1.1 percent. Medical costs, meanwhile, rose 0.4 percent last month and are up at an annual rate of 7 percent so far this year. Other goods and services also rose 0.4 percent and are 7.1 percent higher than they were a year ago, the government said. Food buyers last month found seasonally adjusted meat, poultry, fish, egg and fresh fruit and vegetable prices lower than they were in October. However, prices were higher for canned and dried fruits and vegetables, restaurant meals and alcoholic beverages.
