WASHINGTON — A measure of U.S. consumer prices fell in May by the most since December 2008, pulled down by a plunge in gas prices. Excluding volatile food and energy costs, prices rose only modestly.
The Labor Department said Thursday that the consumer price index dropped 0.3 percent. Gas prices sank 6.8 percent, also the most since December 2008. Food costs were unchanged.
Mild price increases give consumers some relief at a time when unemployment is high and wage gains are meager. Lower inflation also gives the Federal Reserve more leeway to keep interest rates low.
So-called "core" prices, which exclude food and energy, rose 0.2 percent for the third straight month.
Over the past 12 months ending in May, consumer prices rose 1.7 percent, much less than the pace for the 12 months that ended in April. Core prices have risen 2.3 percent in the past year, the same as for the 12 months ending in March and April. That's close to the Fed's 2 percent target for inflation.