U.S. Consumer Prices Down First Time in a Year

Consumer price index declined 0.1%

Driven by lower oil prices, consumer prices fell for the first time in 13 months. The consumer price index declined 0.1%, the Labor Department said on May 19.

The core CPI, which strips out volatile energy and food items and is closely watched by the central bank in considering interest rates, remained unchanged for the second straight month.

Year-on-year prices increased only 0.9%, the lowest growth rate since January 1966. "At these levels, the Fed will have no incentive to raise rates in the near future," analysts at Briefing.com said.

The data came a day after the government said U.S. producer prices also declined in April, reversing last month's rise and easing any immediate fears of inflation.

The producer price index -- the measure of wholesale inflation, or the prices that businesses pay for their goods -- dropped 0.1% in April after rising 0.7% in March.

Copyright Agence France-Presse, 2010

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