October 17, 1984

The Economy Industrial production fell 0.6 percent last month, the Federal Reserve reported. It was the first monthly decline since the recession ended in November 1982. The Reagan Administration characterized it as good news, although one senior official suggested that prospects for the economy might be turning bleaker than the White House and most economists have been predicting. (Page A1.) Most major banks cut their prime lending rate to 12 1/2 percent , from 12 3/4 percent. The move, which had been expected, reflects a slowing in the growth of the economy. The reduction, however, did not match the step taken on Monday by Bankers Trust, which lowered its prime rate to 12 1/4 percent. (D1.)

CATERING to the vehement food likes and dislikes of children and teen-agers is hard enough in a family. Multiplied several hundredfold, the task seems insurmountable. Making institutional food taste good is admittedly difficult. The task is almost impossible when the institution is a school where money is limited; the time for eating is short - sometimes 20 minutes; the lunchrooms are often dreary, and educators treat the lunch hour as the least important part of the day. Despite such problems, some school lunches have been improving, starting in the mid-1970's, when the country's nutrition consciousness was raised. That set the stage for a new type of school food-service director, one committed to getting a healthful, appealing meal into the students instead of the garbage. Croissants and taco salads, French bread pizzas and nachos with cheese - these and other attractions from the nation's fast-food restaurants can now be found in some of the country's most innovative school lunch programs. Not that they have replaced the fish sticks and beef stew that millions of children love to hate. Rather, they have added a variety to the menus that have some youngsters admitting they like school lunch.

The bells of the Chapel of the Good Shepherd at General Theological Seminary began ringing at 9:05 yesterday morning. In his room on the third floor, Bishop Desmond Tutu sat with his wife, Leah, and listened to them sound with joy over his Nobel Peace Prize. ''I slept badly last night,'' said Bishop Tutu, general secretary of the South African Council of Churches and the leading spiritual voice of blacks in South Africa. He became a visiting professor in Anglican studies at the seminary at Ninth Avenue and 21st Street last month.

Canada's car industry is one of the brightest spots in the country's economy - a triumph, as it happens, that is in large part a matter of luck. The gradual erosion of the country's dollar to a level of about 76 cents in United States currency, although raising the cost of living, has made exports considerably more attractive. The bigger car models made here, which Canadians complained about five years ago when gasoline prices were skyrocketing, are now best sellers. Even the country's militant United Automobile Workers union does not seem so menacing to American companies - despite the strike deadline faced by General Motors on Wednesday - when they consider the currency differential and the fact that the Canadian federal and provincial governments pick up the tab for medical benefits. 'In the Right Place' ''The fact the companies are a success is the result of circumstances over which they've had no control,'' said Maryann Keller, an analyst with Vilas-Fisher Associates Ltd. in New York. ''They just happen to be in the right place at the right time.''

A review of Susan Cheever's book ''Home Before Dark'' last Thursday misstated the circumstances of her 1977 Newsweek interview with her father, John Cheever. In addition to a list of questions and answers composed for the interview by Mr. Cheever, his daughter also composed her own list of questions.