WASHINGTON, June 17 (Reuters) – U.S. consumer prices recorded their bigge
decline in nearly 1-1/2 years in May as energy costs dropped, according to a
government report on Thursday that pointed to tame inflation pressures and lo
interest rates.
The Labor Department said its seasonally adjusted Consumer Price Index fe
0.2 percent last month, the largest decline since December 2008, after dippin
0.1 percent in April.
Analysts polled by Reuters had forecast consumer prices slipping 0.2
percent in May. In the 12 months to May, the CPI rose 2 percent, slowing from
the 2.2 percent rise the prior month, also in line with market expectations.
The data followed a report on Wednesday showing prices received by farms,
factories and refineries fell last month. Inflation remains a distant threat
the economy slowly recovers from the longest and deepest recession since the
1930s.
The Federal Reserve is expected to extend its ultra low interest rate
policy next week and is not seen lifting overnight interest rates from near
zero until next year.
In May, energy prices fell 2.9 percent, the largest decline in more than
year. With energy costs falling, gasoline prices tumbled 5.2 percent – the
biggest drop since December 2008. Food costs were flat for the first time sin
October.
Excluding the volatile energy and food prices, the closely watched core
measure of consumer inflation edged up 0.1 percent after being flat in April.
Analysts had expected core prices to rise 0.1 percent. The monthly core
inflation rate was bumped up by increases in costs at hotels and motels, and
for apparel, tobacco, medical care and used vehicles.
In the 12 months to May, the core inflation rate rose 0.9 percent after
increasing by the same margin in April. The rise was also in line with market
expectations.
decline in nearly 1-1/2 years in May as energy costs dropped, according to a
government report on Thursday that pointed to tame inflation pressures and lo
interest rates.
The Labor Department said its seasonally adjusted Consumer Price Index fe
0.2 percent last month, the largest decline since December 2008, after dippin
0.1 percent in April.
Analysts polled by Reuters had forecast consumer prices slipping 0.2
percent in May. In the 12 months to May, the CPI rose 2 percent, slowing from
the 2.2 percent rise the prior month, also in line with market expectations.
The data followed a report on Wednesday showing prices received by farms,
factories and refineries fell last month. Inflation remains a distant threat
the economy slowly recovers from the longest and deepest recession since the
1930s.
The Federal Reserve is expected to extend its ultra low interest rate
policy next week and is not seen lifting overnight interest rates from near
zero until next year.
In May, energy prices fell 2.9 percent, the largest decline in more than
year. With energy costs falling, gasoline prices tumbled 5.2 percent – the
biggest drop since December 2008. Food costs were flat for the first time sin
October.
Excluding the volatile energy and food prices, the closely watched core
measure of consumer inflation edged up 0.1 percent after being flat in April.
Analysts had expected core prices to rise 0.1 percent. The monthly core
inflation rate was bumped up by increases in costs at hotels and motels, and
for apparel, tobacco, medical care and used vehicles.
In the 12 months to May, the core inflation rate rose 0.9 percent after
increasing by the same margin in April. The rise was also in line with market
expectations.