Consumer prices fell unexpectedly in March, as the inflation figures for the past year fell at the fastest rate in more than 50 years, according to a Labor Department report released Wednesday. The Labor Department said that consumer prices fell at 0.1 percent last month. The drop came as energy prices fell, and tobacco prices rose to its highest level in over 10 years. Over the past 12 months, consumer prices have fallen 0.4 percent, the first 12-month decline since a similar drop for the year ending in August 1955. Core inflation, which excludes energy and food, rose 0.2 percent last month, matching the gains of the past three months. It was slightly higher than the 0.1 percent rise economists expected. Over the past 12 months, core inflation has risen 1.8 percent. While some economists have expressed fears the recession could stem a destabilizing period of falling prices, other analysts point to the rise in core inflation as evidence that deflation remains only a distant threat. Some economists worry that all of the moves the Federal Reserve has made to fight the recession and the worst financial crisis in 70 years could be setting a foundation for future inflation troubles. In a speech Tuesday, Federal Reserve Chairman Ben Bernanke repeated assurances that the central bank is always mindful of the threats of inflation and is prepared to remove the monetary stimulus it has provided once the economy shows signs of stabilizing.
