By Lucia Mutikani
WASHINGTON (Reuters) - U.S. producer prices fell for a third straight month in November, pointing to a lack of inflation pressure that could give the Federal Reserve pause as it weighs the future of its bond-buying stimulus.
The Labor Department said on Friday its seasonally adjusted producer price index slipped 0.1 percent as gasoline prices maintained their downward trend. Prices received by the nation's farms, factories and refineries fell 0.2 percent in October.
It was the first time since October of last year that producer prices had fallen for three consecutive months and analysts had expected prices would be flat in November.
"There is no inflation coming up the pipe into what producers are receiving for their goods, which means they are not going to be passing anything on to consumers," said Omair Sharif, an economist at RBS in Stamford, Connecticut.
In the 12 months through November, producer prices gained 0.7 percent after rising 0.3 percent in October.
Wholesale prices stripping out volatile food and energy costs nudged up just 0.1 percent last month after rising 0.2 percent in October. The 12-month gain slipped to 1.3 percent from 1.4 percent in October.
U.S. Treasuries prices rose marginally as the data suggested inflation would remain below the Fed's 2 percent target for some time to come, eroding the case for withdrawing stimulus soon. Some analysts think the Fed could ease back on support as early as the next meeting on December 17-18, although most tip early 2014.
Stocks on Wall Street were up modestly, while the dollar was little changed against a basket of currencies.
Despite signs of the economy is strengthening, there is little to indicate price pressures will pick up soon, given the still-considerable slack in the labor market.
FOCUS ON FED
Some Fed officials have raised concerns about inflation being too low, as they mull the future of their $85 billion a month bond-buying program. A core inflation gauge closely followed by the central bank was up just 1.1 percent in October.
"There are some who worry that sub-par economic growth may be contributing to worrisome deflationary pressures," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York.
"Inflation persistently below (the Fed's) 2 percent objective could pose risks to economic performance. That means they might not stop trying to boost the economy through their low rates and quantitative easing policies."
Consumer inflation data next week is expected to show prices barely rising in November, according to a Reuters survey, and domestic inflation is expected to remain subdued through next year, even as growth accelerates.
"The global economy and the energy revolution are restraining most prices and it is hard to see why that would change anytime soon," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
Last month, wholesale gasoline prices fell 0.7 percent, accounting for nearly three-quarters of the decrease in the energy index and building on a 3.8 percent decline in October.
Wholesale food prices were flat, with higher prices for pork offset by a record fall in bakery goods and the biggest drop in the prices for young chickens in nearly three years.
Passenger car prices fell 0.8 percent after increasing 1.7 percent in October as new vehicle models were introduced. Light truck prices increased 0.6 percent.
(Reporting by Lucia Mutikani; Editing by Krista Hughes)