WASHINGTON — Producer prices in December recorded the biggest drop in more than three years as energy prices continued to tumble. With underlying inflation pressures remaining light, it was a cautionary signal for the Federal Reserve as it considers its next move on monetary policy.

The Labor Department said on Thursday that 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 Augustine Faucher, senior economist at PNC Financial Services Group in Pittsburgh. “The Fed needs to be more cautious about raising interest rates.”