Inflation holds at 12.5% a year
Consumer prices rose in November by 1 percent for the third consecutive month. Higher interest rates, combined with rising food prices, were largely to blame for keeping the inflation rate running at 12.5 percent annually. The latest Labor Department figures mean the same goods and services that cost $100 in 1967 now cost the typical American city resident $256.20.
Meanwhile, the Commerce Department reported that the economy rebounded much more sharply in the third quarter than previously thought. The department issued revised figures on the gross national product back on 1929. They showed that for the past decade the economy has been growing slightly faster than previously estimated. Other revised figures showed that in recent years Americans have been saving a larger proportion of their income thant had been thought.
The Commerce Department said that real gross national product, adjusted for inflation, increased at an annual rate of 2.4 percent during the July-September quarter, compared with a previously estimated 0.9 percent increase.
Elsewhere on the economic front, Chase Manhattan Bank followed the Wells Fargo Bank by cutting its prime lending rate 1 percent, to 20 1/2 percent.