U.S. prices fall for second straight month

The Consumer Price Index dropped by 1.7 percent in November, falling for the second consecutive month, the U.S. Department of Labor said Tuesday.

The decline exceeded economists expectations of a 1.3 percent drop and indicates that consumers have sharply reduced spending.

Core inflation, taking out the influences of food and energy costs, was flat in November, but came in 2 percent higher than November 2007, the report said.

Falling energy prices, particularly gasoline, drove the decline in the overall index, the report said.

Energy prices dropped 17 percent in November, while the price index for gasoline dropped 29.5 percent.

Food and beverage prices rose 0.2 percent following a 0.3 percent rise in October.

In November, housing prices fell 0.1 percent, transportation prices fell 9.8 percent and medical prices rose 0.2 percent.