WASHINGTON - Inflation stayed docile for a third consecutive month in November, helped by falling energy prices and lower costs for everything from new cars and airline tickets to food and clothing.
The Labor Department reported Friday that its closely watched Consumer Price Index was unchanged after sharp declines of 0.5 percent in September and October.
The good news on inflation reflected a big retreat for energy prices, which are down from the record highs set this summer.
Economists also were encouraged by the widespread declines in other areas, saying they provided strong evidence that the slowing economy was helping to lower inflation pressures, just as the Federal Reserve had hoped.
Core inflation, which excludes energy and food, was unchanged in November, the best showing in 17 months.
"The inflation scare of 2006 is over," said Kenneth Beauchemin, an economist at Global Insight, a private forecasting firm.
In a second report, the Federal Reserve said that industrial production rose 0.2 percent in November, the first increase after two months of declines.
The rebound was led by a 0.3 percent jump in output at factories as auto plants posted a strong 3.7 percent increase after two months of big declines.
Analysts viewed the pickup in factory activity as a good sign that the Fed will be able to achieve its goal of slowing economic growth enough to keep inflation in check without triggering a recession.
"The economic jet engine is coming in for a soft landing," said Mark Zandi, chief economist at Moody's Economy.com. "We have gotten a string of good inflation readings and while the economy is still soft, it is not headed for a recession."
The Fed's comfort zone for core inflation is between 1 percent and 2 percent, and many economists said the Fed was likely to keep rates on hold, as it did this week, until the readings fall further. They said the Fed is likely to start cutting rates by May or June next year.
For November, overall energy costs were down 0.2 percent after even bigger declines of 7.2 percent in September and 7 percent in October. U.S. prices have retreated after global crude oil prices began falling this summer.
Gasoline pump prices were down 1.6 percent last month, but natural gas, the most popular home heating source, increased 4.7 percent.
Food costs dipped 0.1 percent, the best showing since January 2004.