U.S. consumer prices fell in November for the first time in six months, largely due to a steep decline in gasoline costs, pointing to subdued inflation pressures, the government reported Friday. The Labor Department said its consumer price index (CPI) fell 0.3 percent last month as the sharp drop in gasoline prices offset increases in other areas. It was the biggest decline since May and followed a 0.1 percent gain in October. Over the past 12 months, consumer prices have increased 1.8 percent, the smallest year-over year gain since August, and down from October's 2.2 increase. In November, gasoline prices fell 7.4 percent, the biggest drop in almost four years, following a 0.6 percent drop the previous month. The decline in fuel costs offset a 0.2 percent increase in food prices. Excluding volatile energy and food costs, core CPI rose 0.1 percent last month and has risen 1.9 percent in the past year. In November, core prices were pushed higher by rents, airline fares, and new cars. The costs of clothing and used cars fell. High unemployment and slow wage growth have made businesses reluctant to increase prices. Many worry that higher prices could drive away customers, helping to keep inflation tame. The Federal Reserve (Fed) said Wednesday it expected to keep interest rates near zero percent until unemployment falls to 6.5 percent and as long as inflation does threaten to rise above 2.5 percent.
