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.
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