US consumer prices edged up in May on higher petrol prices, but fell over the past 12 months by the most since 1950, in a sign that inflation was not a threat for now as the country fights a brutal recession.
The Labour Department yesterday said its Consumer Price Index (CPI) edged up 0.1 per cent month on month, after being flat in April, below market expectations for a 0.3 per cent increase. Compared with the same period last year, however, consumer prices fell 1.3 per cent, the largest decline since April 1950.
Concerns have grown in recent weeks that inflation could resurface this year, given massive efforts by the US government and the Federal Reserve to pull the economy out of the longest recession since the Great Depression of the 1930s.
A separate report from the Commerce Department showed the US current account deficit shrank in the first quarter to $101.5bn, the lowest since the fourth quarter of 2001.
The CPI data showed that core prices, excluding food and energy, also rose only 0.1 per cent, slower than April’s 0.3 per cent monthly increase, as prices for tobacco and smoking products fell.