Consumer prices in the U.S. unexpectedly decreased in the month of March, according to a report released by the Labor Department on Friday, with prices showing their first drop in a year.
The Labor Department said its consumer price index fell by 0.3 percent in March after inching up by 0.1 percent in February. Economists had expected consumer prices to come in unchanged.
The drop by the consumer price index reflected its first decrease since February of 2016.
The unexpected decline in consumer prices partly reflected a steep drop in energy prices, which plunged by 3.2 percent in March after slumping by 1.0 percent in February.
Excluding food and energy prices, the core consumer price index edged down by 0.1 percent in March following a 0.2 percent increase in the previous month. Core prices had been expected to rise by 0.2 percent.
Lower prices for wireless telephone services, used cars and trucks, new vehicles, and apparel contributed to the drop in core prices.
With the monthly drop in prices, the annual rate of consumer price growth slowed to 2.4 in March from 2.7 percent in February.
Core consumer prices in March were up by 2.0 percent compared to a year ago, reflecting a slowdown from the 2.2 percent growth seen in February.
On Thursday, a separate report released by the Labor Department showed a modest decrease in producer prices in the month of March.
The Labor Department said its producer price index for final demand edged down by 0.1 percent in March after rising by 0.3 percent in February. Economists had expected prices to come in flat.
The report also said core producer prices came in unchanged in March following a 0.3 percent increase in February. Core prices had been expected to rise by 0.2 percent.
by RTT Staff Writer
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