WASHINGTON (AP) — U.S. wholesale prices dropped inNovember for the third consecutive month, pushed
down again by cheapergasoline and lower home heating oil costs. But excluding volatile energycosts,
inflation was mostly stable.The producer price index,which measures prices before they reach the consumer,
declined 0.1percent last month, the Labor Department said Friday. This comes aftersimilar decreases in
October and September.Overall wholesale prices have risen just 0.7 percent in the past 12
months.Excludingenergy and food prices, so-called core wholesale prices increased 0.1percent in November and
1.3 percent over the past 12 months."Ifyou are worried about upside inflation risks, you need to
lookelsewhere," said Ian Shepherdson, chief economist at PantheonMacroeconomics.Both consumer and
wholesale inflation have beenrunning extremely low in the past year. High unemployment and weak
wageincreases have made it difficult for businesses to raise prices.Mildinflation has allowed the Federal
Reserve more latitude to use itspolicies to try and stimulate growth. And some Fed officials have
raisedconcerns that inflation is running too low.Energy costs havekept inflation well below the Fed’s 2
percent target. In November, gascosts tumbled 0.7 percent and home heating oil prices plunged 5.7percent.
The costs for new cars also fell 0.8 percent last month.Consumersare benefiting from cheaper prices,
particularly when they fill uptheir cars and trucks. The average national price for a gallon of gaswas just
$3.25 on Friday, according to AAA’s Daily Fuel Gauge Report.Thecosts of raw materials such as corn, wheat,
cane sugar, coal and ironore have each fallen over the past 12 months. Those declines suggestthat inflation
should be held in check in the months ahead.Wholesalefood prices were flat last month. Pork costs increased
5.6 percent, butthe wholesale prices for bread rolls, muffins, bagels and croissantsfell 4.2 percent after a
sharp rise in October.The Fed has saidit will keep the short-term interest rate it controls at nearly zero
atleast until the unemployment rate falls below 6.5 percent and as long asinflation isn’t expected to rise
above 2.5 percent at an annual rate inthe near future. The unemployment rate fell to 7 percent in
November.Low inflation has also allowed the Fed to continuing buying bonds to try and lower long-term
interest rates.Fed officials meet on Tuesday and Wednesday to evaluate their interest rate
policies.Copyright 2013 The Associated Press. All rightsreserved. This material may not be published,
broadcast, rewritten orredistributed.