Consumer prices in the U.S. fell by a little more than expected in the month of November, according to a report released by the Labor Department on Friday, with the decrease in prices largely due to a sharp drop in energy prices.
The Labor Department said its consumer price index fell by 0.3 percent in November following a 0.1 percent increase in October. Economists had been expecting prices to edge down by 0.2 percent.
The bigger than expected drop in consumer prices was largely due to a steep drop in energy prices, which fell by 4.1 percent in November after dipping 0.2 percent in October.
Gasoline prices tumbled by 7.4 percent in November, representing the largest decrease in gas prices since December of 2008.
However, the Labor Department noted that the change in energy prices over the past 12 months is relatively modest despite the month-to-month volatility, with the energy index up 0.3 percent compared to the same month a year ago.
The report also showed that food prices rose by 0.2 percent in November, matching the modest increase seen in the previous month.
Excluding the steep drop in energy prices as well as the modest increase in food prices, the core consumer price index inched up 0.1 percent in November after rising by 0.2 percent in October. Core prices had been expected to increase by 0.2 percent.
Higher prices for shelter, household furnishings and operations, airline fares, recreation, new vehicles, and medical care were partly offset by drops in prices for apparel and used cars and trucks.
Compared to the same month a year ago, the headline consumer price index rose 1.8 percent in November, reflecting a deceleration from the 2.2 percent annual growth seen in October.
Core consumer prices increase at an annual rate of 1.9 percent in November compared to the 2.0 percent increase seen in the previous month.
Paul Ashworth, Senior U.S. Economist at Capital Economics, said, "A drop back in gasoline and clothing prices pushed the annual rate of U.S. CPI inflation back below the Fed's 2% target in November."
"We anticipate very little change next year, which will allow the Fed to continue focusing its efforts on boosting activity in the real economy," he added.
Thursday morning, the Labor Department released a separate report showing that producer prices fell by more than expected in November.
The report showed that the producer price index fell by 0.8 percent in November following a 0.2 percent drop in October. Economists had been expecting prices to fall by about 0.5 percent.
Excluding a sharp drop in energy prices as well as an increase in food prices, the core producer price index edged up by 0.1 percent in November after dipping by 0.2 percent in October. Core prices had been expected to rise by 0.2 percent.
The annual rate of producer price growth slowed to 1.5 percent in November from 2.3 percent in October, while core prices were up by 2.2 percent year-over-year.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.