WASHINGTON – U.S. consumer prices fell 0.6 percent in November, the largest decline in 56 years, as energy prices posted a record 8.0 percent drop in the month, the government said on Thursday.
The slide in prices was slightly larger than the 0.4 percent reversal expected by Wall Street and was the biggest decrease in prices since July 1949.
Excluding food and energy costs, so-called core inflation rose 0.2 percent in November, in line with market forecasts.
Over the past year, consumer prices have climbed 3.5 percent, a slowdown from October's 4.3 percent inflation rate but still above the 12-month increase in average weekly earnings - meaning consumer budgets are not keeping pace with rising prices.
Core inflation on a year-on-year basis remained at a relatively tame 2.1 percent in November.
The decline in prices in November was driven by sharp decreases in energy costs following a hurricane-related spike in the fall. Gasoline prices dropped 16.0 percent, the largest monthly decline according to records dating back to 1967, while fuel oil costs fell 6.1 percent and natural gas prices fell 0.5 percent.
Electricity prices rose, however, by 3.8 percent - the largest increase in records dating back to 1952.
Other costs also rose in November. Food prices rose 0.3 percent, service costs climbed 0.5 percent and medical care costs surged 0.6 percent. Housing costs, which include both shelter at home and lodging away from home, increased 0.5 percent in the month and were up 4.0 percent from a year earlier.
In a separate report, the Labor Department said real average weekly earnings rose 0.6 percent in November after a 0.5 percent gain the prior month - reversing a long string of declines. Average weekly earnings have risen 3.2 percent from November 2004 — but since inflation has risen even faster, real earnings remain 0.4 percent lower than a year earlier.