http://www.msnbc.msn.com/id/28252040/

U.S. consumer prices plunged at a record rate for a second straight month during November, according to a government report on Tuesday that is likely to fan fears that economic recession is rapidly heightening risks of deflation.

Meanwhile, the construction of new homes plummeted in November by the largest amount in almost a quarter-century as builders slashed production in the face of a recessionary economy.

The Labor Department said its closely watched Consumer Price Index dropped 1.7 percent after falling 1 percent in October — back-to-back record drops since the department started keeping monthly data in 1947. Core prices that exclude food and energy items were flat in November after declining 0.1 percent in October.

The drop in overall prices exceeded forecasts by Wall Street economists who had expected a 1.2 percent decline.

On a year-over-year basis, consumer prices were up 1.1 percent after a 3.7 percent increase in October. It was the smallest rise since mid-2002.

Energy prices plummeted 17 percent last month, double the 8.6 percent fall in October. It was the largest monthly decrease in energy prices since the department started monthly records in 1957.

Separately, the Commerce Department said Tuesday that new home starts fell to a seasonally adjusted annual rate of 625,000 from a downwardly revised level of 771,000 in October.

That is a drop of 18.9 percent, the steepest since March 1984. The total is far below the 740,000 pace that Wall Street economists expected.

Applications for building permits, considered a good sign of future activity, fell by 15.6 percent to 616,000, from an upwardly revised figure of 730,000 in October. Economists expected an annual rate of 700,000 permits, according to a survey by Thomson Reuters.

The housing starts and permit figures are at all-time lows, breaking records that were set last month.

Builders continue to be discouraged by the prospects of a housing turnaround amid what's likely to be the worst recession in decades, spurring rising unemployment and foreclosures.

More dour housing news came Monday, as the National Association of Home Builders/Wells Fargo housing market index held at a record-low level of nine in December for the second straight month.

"It is going to be a very cold winter indeed for homebuilders," Joshua Shapiro, chief U.S. economist for forecasting firm MFR Inc., wrote in a note to clients Monday.