November Consumer Prices Drop in U.S., Eurozone

Consumer prices in United States during November dropped 0.6 percent, the sharpest slide in 56 years according to the latest release from the US Labor Department. The European Union also reported a similar slide in November with a 0,3 percent inflation contraction.

The fall was driven by a record 8 percent plunge in energy costs in the month, following a previous surge in oil prices in the wake of Hurricane Katrina. Analysts had been expecting a 0.4 percent slump in US consumer prices.

Excluding food and energy costs, the so-called “core” measure of US inflation rose in-line with forecasts by 0.2 percent in November. Over the past year, US consumer prices have climbed by 3.5 percent.

The European Union experienced a similar situation during November, with inflation unexpectedly slowing down. Consumer prices in the 12 nations using the euro fell by 0.3 percent in November from October, the EU statistical office reported Friday.

Earlier this month the European Central Bank (ECB) raised interest rates for the first time in five years, ignoring criticism that it may slow the economy.