US consumer prices fell 0.6 per cent in November in what was the largest decline in 56 years.
The fall came as energy prices posted a record 8 per cent drop, the US government said today in a report that eased inflation concerns
The slide in consumer prices was slightly larger than the 0.4 per cent 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 per cent in November, in line with market forecasts, and financial markets were little moved by the report.
Over the past year, consumer prices have climbed 3.5 per cent, a slowdown from October's 4.3 per cent inflation rate but still above the 12-month increase in average weekly earnings - meaning consumer budgets are not quite keeping pace with rising prices.
But core inflation on a year-on-year basis remained at a relatively tame 2.1 per cent in November.
The decline in prices in November was driven by sharp decreases in energy costs following a hurricane-related spike in the autumn.
But electricity prices rose by 3.8 per cent - the largest increase in records dating back to 1952. Other costs that rose in November were food prices, which
rose 0.3 per cent; service costs, which
climbed 0.5 per cent; and medical care costs, which
surged 0.6 per cent.
Housing costs, which include both shelter at home and lodging away from home, increased 0.5 per cent in the month and were up 4.0 per cent from a year earlier.