MercoPress. South Atlantic News Agency

November consumer prices drop in US and Eurozone

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

The fall was driven by a record 8% drop 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% fall 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% in November. Over the past year, US consumer prices have climbed by 3.5%.

November's steep fall in consumer prices was fuelled by a 16% drop in the cost of gasoline, the sharpest monthly fall since records began in 1967. Fuel oil costs fell by 6.1%, while natural gas prices fell by 0.5%.

Meantime the US economy continues to expand in spite of the aftereffects of the hurricane season and record oil prices. Economic growth accelerated to an annual rate of 4.3% in the three months from July to September, according to revised last month Commerce Department figures.

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

That cut the annual rate of inflation to 2.3%, down from 2.5% from October.

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.

Many analysts predict that eurozone inflation is on its way down and that the annual rate could hit 2% - the ECB's target - in December.