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U.S. Inflation Drops as Fuel Costs Plunge
The prices Americans pay for goods and services fell 0.3% from April to May, the biggest decline in more than three years, as gasoline prices plummeted 6.8%, the Dept. of Labor says.
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The prices Americans pay for goods and services fell 0.3% from April to May, the biggest decline in more than three years, as gasoline prices plummeted 6.8%, the Dept. of Labor says. Overall energy costs slid 4.3%, the steepest drop since December 2008.
The consumer price index posted a 1.7% gain last month compared to May 2011, the smallest year-over-year increase in 16 months.
The core price index, which excludes food and energy costs, rose 0.2% from April to May, matching its month-over-month advances in March and April. The core index climbed 2.3% from May 2011.
The report confirms the Federal Reserve's prediction that the high oil prices that boosted inflation earlier this year would soon subside. Economists say cheaper gasoline could enable Americans to spend their money on other goods and services. Lower inflation also gives the Fed leeway to take further steps to strengthen the economy.
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