Thursday, June 17, 2010

US prices fall for a second month

 

Fuel pump

  Falling fuel costs dragged prices lower US consumer prices fell for a second straight month in May, after energy prices dropped sharply.

  The US consumer price index dropped 0.2% last month, adding to the 0.1% fall seen in April.

  May's drop in prices was the biggest monthly decline since December 2008.

  But economists said it was unlikely that the trend would result in a dangerous spiral of deflation, as core prices - which strip out energy costs - saw a small rise.

  Core prices rose 0.1% in May, while energy prices dropped 2.9% - the biggest monthly drop in a year. Gasoline prices were down 5.2%.

  The annual rate of inflation now stands at 2%, meeting the US Federal Reserve's target.

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