The consumer price index (CPI) of the United States dropped three tenths in May, the biggest monthly decline in three years and a half, year on year inflation stood at 1.7% , said the Labor Department.
Excluding food and energy prices, which are more volatile, core inflation last month was 0.2%, and the year stood at 2.3%.
The fall in the CPI last month largely reflects the reduction in fuel prices which fell 6.8%, the largest monthly contraction since December 2008.
The government report showed that workers’ hourly earnings rose 0.3% in May.
The indicators confirm the perception of the Fed on inflation in the U.S., which remains very moderate over four years of implementation of a gigantic monetary stimulus the Fed pledged to continue until the end of 2014.
Cheaper energy seems to give some relief to Americans while still modest employment growth and rising wages.
The monetary policy makers, who have been predicting the decline in energy costs for several months, point to an inflation of 2 percent per year as part of its dual mandate of maintaining stable prices making the most use possible.
Category: Business News