Pushed down by declining energy prices, U.S. consumer prices dropped in March, and the annual inflation rate dipped for the first time since 1955, the Labor Department reported Wednesday.

The Consumer Price Index (CPI), the most closely watched gauge for inflation, fell 0.1% after increasing 0.4% in February. The decline was unexpected with many analysts forecasting an increase around 0.1%. On an annual basis, inflation was down 0.4%, marking the first decline since August 1955.

While deflation fears were eased with rising prices revealed in the CPI data for February, the latest numbers rekindle notice.

"We’re in a very deep global recession that’s going to hold prices down," Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, was quoted on Bloomberg. "Deflation is still something that’s a risk, though I don’t think we’ll get into a deflationary spiral."

However, during the last several weeks an outlook for potential stinging inflation has been more of the economic buzz. Continue reading March consumer prices drop 0.1%, annual inflation tumbles 0.4% →

Energy prices drove consumer prices higher for a second month in February and at the fastest pace in seven months, the Labor Department said Wednesday. About two-thirds of the increases resulted from a jump in gasoline pump prices. And with that, the annual U.S. inflation rate climbed to 0.2% after the 0% reading reported in January.

The Consumer Price Index (CPI) increased 0.4% in February — the biggest one-month jump since July — and follows the 0.3% rise in January that economists were again expecting. The extra bump helps dispel some fears of chronic price declines, known as deflation, which can have a devastating impact on the economy and employment.

"Worries about deflation can be set aside right now," Bernard Baumohl, managing director of the Economic Outlook Group, was quoted on NYTimes.com. "It’s unlikely we would have seen inflation drop to negative levels for more than a year, given all the fiscal and monetary stimulus that’s in the economy. The math just didn’t work out."

The CPI is the key government gauge for inflation. The core CPI, which excludes volatile food and energy prices, is even more closely watched. It increased by 0.2% for the second month in a row. Continue reading Consumer prices jump 0.4%, annual inflation at 0.2% →

Diving energy prices drove U.S. consumer prices flat over the past 12 months, marking the lowest inflation rate in more than a half a century, the Labor Department reported Friday. However, energy costs have been ticking upward of late and pulled consumer prices back up in January.

"A bit of inflation is encouraging," Mark Zandi, chief economist at Moody’s Economy.com, was quoted on NYTimes.com. "It means businesses aren’t completely giving up and slashing prices. The fact that they can at least hold the line on their price cuts is a positive."

The Consumer Price Index (CPI), the most closely watched gauge for inflation, rose 0.3% in January following an adjusted 0.8% slide in December. The increase was in line with market expectations and the first positive advance in six months. Still, most economists believe prices will again decline.

"We’re in the heart of the recession right now, and with demand falling rapidly, we can expect downward pressure on prices," Chris Rupkey, chief financial economist in New York at Bank of Tokyo-Mitsubishi UFJ Ltd., was quoted on Bloomberg.com. "Everything is heading in the same direction, which is down. Sales are down, profits are down, prices are coming down."

More and more economists are now focusing on the dangers of continual, out of control falling prices, known as deflation. Even the Federal Reserve has discussed the risks. (See Long-term inflation target set… and Deflation a key risk in 2009…) Continue reading Annual inflation rate at 0%, consumer prices rise 0.3% in January →

The annual rate of U.S. inflation plunged to 0.1% in 2008, with consumer prices driven down by falling energy prices. The cost of living dropped for Americans as prices dipped for the third straight month, and showed the slowest 12-month gain since 1954, the Labor Department reported Friday.

The Consumer Price Index (CPI), the most closely watched gauge for inflation, fell by 0.7% in December after dropping 1.7% in November. Economists had expected the number to come in at 0.8%.

"Overall inflation has already declined significantly and appears likely to moderate further," Fed Chairman Ben S. Bernanke said in a Jan. 13 speech in London that was reported on Bloomberg.com.

"At this point, with global economic activity weak and commodity prices at low levels, we see little risk of inflation in the near term."

Plummeting energy prices was the headliner again. The energy index fell 8.3% and led in the CPI’s decline by accounting for almost 90 percent of the decrease in the all items index. Continue reading 2008 inflation rate at 0.1%, slowest gain in 54 years for consumer prices →

Inflation for consumer products plummeted again during November as prices were pushed down again by free-falling energy costs. Consumer prices declined by a record level for the second consecutive month, the Labor Department reported Tuesday. The annual inflation rate is at 1.1% compared to the 3.7% increase in October.

The Consumer Price Index (CPI), the closely watched inflation barometer, fell in November by a seasonally adjusted 1.7% after October’s record 1.0% decline. Economists had expected a sharp drop between 1.3%-1.4%, which would have been a record itself. The latest figure marks the biggest decline since the government started keeping monthly data in 1947.

"This is scary stuff,” Mike Schenk, an economist for Credit Union National Association was quoted on MarketWatch. "We are teetering on the brink of a massive downward spiral. Deflation is a threat."

"I think we’re in a deflationary spiral that will probably go on until sometime next year," Thomas di Galoma, head of U.S. Treasury trading at Jefferies & Co. in New York was quoted at Reuters. "I think it will probably go on through the majority of 2009."

Falling prices is generally good news for consumers, but only to a certain point. Continue reading Consumer prices fall record 1.7%, inflation drops to 1.1% →

Consumer prices declined in October by a record level, the Labor Department reported Wednesday. The Consumer Price Index (CPI), which is the most watched government inflation barometer, retreated to 3.7% during the previous twelve months and follows a decline of 4.7% in September.

On a monthly basis, the index fell 1% to mark the largest one month decrease since publication of seasonally adjusted changes began in February 1947. Economists were expecting a 0.9% decline.

"We are moving into an environment where prices are falling across the board," David Resler, chief economist at Nomura Securities International Inc. in New York, said in an interview with Bloomberg Television. "That is going to continue. Deflation is spreading across the economy."

Continue reading Consumer prices fall record 1%, inflation drops to 3.7% →

Consumers got a respite on inflation in September, the Labor Department reported Thursday. The Consumer Price Index (CPI), which is the most watched government inflation barometer, retreated to 4.9% during the previous twelve months.

While overall U.S. consumer prices remained virtually unchanged, food prices increased and energy prices tumbled. September’s 30-day standstill follows an August monthly drop of 0.1% and an annual inflation rate of 5.4%.

Falling energy prices combined with a slowing economy eased consumer prices those two months. Inflation began its most ugly uptrend in April. It peaked to a 17-year high of 5.6 percent in July, during a time consumer and energy prices were at their highest — oil reached a record near $147 per barrel.

"Consumer price inflation has gone dormant, as the recent abrupt slowdown in world economic growth has led to sharp declines in energy costs, while weak domestic demand is putting downward pressure on retail prices in many key markets," wrote Dr. Brian Bethune, chief U.S. financial economist for Global Insight.

Oil prices tumbled Wednesday, closing on Nymex under $75 per barrel for the first time in more than one year. With less costly oil, weaker import prices and falling producer prices, inflation in October is expected to ease further.

Continue reading Consumer prices flat, inflation eases to 4.9% in September →