A measure of U.S. consumer inflation fell in May by the largest amount since late 2008, as gasoline prices fell sharply. Excluding volatile energy and food costs, prices rose modestly, the government reported Thursday. The Labor Department said its consumer price index (CPI) fell 0.3 percent last month, as gasoline prices plummeted 6.8 percent, also the most since December 2008. Food prices were unchanged. “Core” CPI, which excludes energy and food, rose 0.2 percent for the third consecutive 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, and close to the Federal Reserve (Fed) 2-percent target for inflation. Mild price increases leave consumers with more money to spend, which supports economic growth. Lower inflation also gives the Fed more room to keep interest rates low. Steady increases in rents for homes and apartments are pushing up core prices, though modestly. Rents are increasing as more people avoid home ownership and rent instead. Gasoline prices have plunged since peaking in early April. The decline in gasoline and other energy costs caused a measure of U.S. wholesale inflation to drop by the most in almost three years in May.
