U.S. consumer prices drop by largest amount in 61 years

WASHINGTON, Dec. 16 (Chinese media) -- 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.