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%