By Alex Kowalski
WASHINGTON - The cost of living in the United States fell in April for a second consecutive month, the first back-to-back declines in inflation since late 2008, as fuel prices retreated.
The consumer price index decreased 0.4 percent, the biggest decrease since December 2008, after falling 0.2 percent in March, according to Labor Department figures released today in Washington. Economists surveyed by Bloomberg projected a 0.3 percent drop, according to the median estimate. The so-called core price measure, which excludes more volatile food and energy costs, increased 0.1 percent, less than projected.
Cheaper fuel costs are helping consumers overcome the burden of higher taxes and anemic wage gains by freeing up extra cash to spend elsewhere. Apart from receding energy expenses, subdued gains in the price of other goods and services give officials at the Federal Reserve latitude to adjust policy should they decide the economy needs more monetary stimulus.
“We’ve seen very aggressive declines in gasoline prices, and that has some pass-through into other goods and services,” Laura Rosner, a U.S. economist at BNP Paribas in New York, said before the report. “The Fed is watching the weakness in core inflation. It’s not their baseline assumption that the weakness will continue or worsen, but if it did, that would be a serious concern and would make them think about a response.”
Price-index estimates from the 81 economists surveyed ranged from a drop of 0.4 percent to a gain of 0.3 percent.
More Americans than projected filed applications for unemployment benefits last week, which may raise concern the slowdown in economic growth is prompting an increase in firings, another Labor Department report showed today.