Consumer prices in the United States fell by 1.7 percent in November, the largest one-month decline dating to February 1947, as energy costs dropped sharply, the Labor Department reported Tuesday.
The November drop in consumer prices surpassed the previous record decrease of 1 percent set in October and was larger than the 1.2 percent drop that analysts had been expecting.
The report showed that energy prices plunged 17 percent last month, nearly double the 8.6 percent decline in October. Both declines represented record drops.
The 17 percent drop was the fourth straight monthly decline in energy costs. The back-to-back retreat came after energy costs recorded big advances in May, June and July.
Gasoline costs fell by a record 29.5 percent in November, while home heating oil costs were down 14.6 percent and natural gas prices were off 5.2 percent.
Meanwhile, food costs posted a modest 0.2 percent rise in November, the smallest gain in eight months, after having edged up0.3 percent in the previous month.
The report also showed that “core” consumer prices, which exclude volatile energy and food costs, were flat in November, compared with a 0.1 percent decline in October.
New car costs fell by 0.6 percent in November, underscoring the troubles facing auto companies as demand plunges in the weak economy. Airline prices dropped by 4 percent, reflecting the big declines in fuel prices.
Consumer prices measure inflation pressures at the retail level. Falling prices for goods and services might sound like a good thing for consumers, but a continued downward spiral could mean that the country is heading for a bout of deflation, which economists say is more dangerous than inflation.
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