WASHINGTON (Reuters) – U.S. producer prices in December recorded their biggest fall in more than three years on tumbling energy costs while underlying inflation pressures were tame, a cautionary note for the Federal Reserve as it ponders its next step on monetary policy. The Labor Department said on Thursday its producer price index for final demand declined 0.3 percent, the biggest drop since October 2011, after falling 0.2 percent in November. "That makes the Fed’s job more difficult," said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh. "We expect inflation to slow … the Fed needs to be more cautious about raising interest rates." In the 12 months through December, prices at the factory gate increased 1.1 percent, the smallest gain since November 2013, after rising 1.4 percent in November. A broader measure of underlying producer inflation pressures that excludes food, energy and trade services edged […]