U.S. wholesale prices fell in November, the government said on Thursday in a report showing inflation remains contained as a sluggish global economy kept imported energy prices low.

The Producer Price Index -- a measure of costs at the factory door and farm gate -- fell 0.6 percent compared to a record 1.6 percent drop the previous month, the Labor Department said. The drop in prices was larger than Wall Street expectations of a 0.3 percent decline.

Excluding food and energy products, so-called core wholesale prices rose 0.2 percent after a fall of 0.5 percent in October. Analysts were expecting the core rate to rise 0.1 percent.

``PPI was very well behaved due to energy, though there was a rebound in car prices. Aside from that, the trend is soft in terms of prices. That confirms weakness in economic activity,'' said Jade Zelnik, chief economist for Greenwich Capital Markets.

The price of passenger cars and tobacco products helped boost the core rate. Tobacco products prices, which were flat in October, rose 1.8 percent. Passenger car prices posted a gain of 0.9 percent following a 4.7 percent drop in October when shoppers rushed to take advantage of low-interest financing deals.

Energy prices continued to tumble, dropping 3.8 percent. Gasoline prices continued their downward spiral, posting a drop of 10.3 percent. Prices for heating oil registered a 7.4 percent decline. Oil prices have dropped over $10 per barrel since mid-September as the slower economy has dampened demand.

Food prices fell 0.8 percent, the biggest drop since April, 1999. The cost of food products fell across the board although the price of Thanksgiving turkeys rose a sharp 5.3 percent.

The report provided yet more evidence that the Federal Reserve does not need to worry about inflation when cutting interest rates.

The U.S. central bank has said it does not see inflation as an imminent problem for the U.S. economy. In a statement released on Tuesday, when it cut interest rates for the 11th time this year to 1.75 percent from 2.00 percent, the Fed said: ''Economic activity remains soft, with underlying inflation likely to edge lower from relatively modest levels.''

Analysts said this wording indicates that risks of stoking inflationary pressures with easy money will not stand in the way of further Fed rate cuts if they prove needed to revive an economy in its ninth month of recession.