Consumer prices dropped 1.7 percent last month, the most since record-keeping began in 1947, the Labor Department said today in Washington. Excluding food and energy, so-called core prices were unchanged from a month earlier.
Costs of oil and other raw materials plummeted last month as a credit crisis intensified, forcing consumers to slash spending and prompting U.S. automakers to ask for a federal rescue package. Tumbling sales have retailers cutting prices, bolstering economists' expectations the Federal Reserve later today will cut its target rate to the lowest level ever.
Prices increased 1.1 percent in the 12 months to November, after a year-over-year gain of 3.7 percent in October. They were forecast to climb 1.5 percent from a year earlier, according to the survey median.
The core rate gained 2 percent from November 2007, after a 2.1 percent year-over-year increase the prior month.
Energy costs dropped 17 percent, the most since 1957, today's report said. Gasoline prices plunged 29.5 percent, and fuel oil costs fell 14.6 percent. Natural gas prices declined 5.2 percent from a month earlier.
Oil prices have fallen further this month. Crude oil futures on the New York Mercantile Exchange fell as low as $40.50 in intraday trading on Dec. 5 after averaging $57.44 in November.
The consumer-price index is the last of three monthly price gauges from the Labor Department. The CPI is the government's broadest gauge of costs because it includes goods and services.
Prices paid to U.S. producers fell for a fourth month in November, sliding 2.2 percent, the government said last week. Import costs last month decreased by the most on record due to falling energy prices, Labor figures showed last week.
Food prices, which account for about a fifth of the CPI, gained 0.2 percent after a 0.3 percent increase in October.
New-vehicle prices declined 0.6 percent in November and clothing costs increased 0.3 percent. The price of airfares fell 4 percent in November from a month earlier.
The cost of medical care gained 0.2 percent, while housing costs dropped 0.1 percent, the report showed.
Today's figures also showed wages increased 2.3 percent after adjusting for inflation, following a rise of 1.6 percent in October.
The recession, already a year long, will continue to slow inflation. Consumer prices will probably rise just 0.7 percent in the 12 months ended in September 2009, the smallest year-over- year gain since 1962, according to economists surveyed last week by Bloomberg News.