Lower oil prices in the United States meant inflation fell more in May than it has in three years, the Labor Department said Thursday.
Prices fell by 0.3 per cent month-on-month, more than expected and
the sharpest fall since December 2008, the department said. Price
levels in April had remained unchanged compared to the previous
month.
Economists had expected a fall of 0.2 per cent in May. In the 12
months to May, inflation fell by 1.7 per cent, the lowest reading
since January.
However, excluding more volatile energy and food prices, inflation
increased for the third month in a row, by 0.2 per cent. The 12-month
figure was 2.3 per cent, the same as in April and March.
The lower prices should allow the Federal Reserve to continue its
policy of record-low interest rates in its efforts to boost the
economy.
