U.S. consumer prices rose slightly in May on higher gasoline costs, but posted the steepest annual decline in 59 years, in a sign that inflation was not threat as the country fights a deep recession. The Labor Department reported Wednesday that its consumer price index (CPI) rose 0.1 percent last month after being flat in April. May's increase was smaller than the 0.3 percent rise expected by analysts. Compared to the same month a year ago, however, consumer prices have fallen 1.3 percent, the biggest decline since April 1950. The recession is keeping prices down as the unemployment rate has reached a 26-year high and factories are operating at record-low levels. Workers concerned about their job security are less likely to seek higher pay, while low consumer demand has made it difficult for companies to raise prices. Excluding volatile energy and food costs, May's “core” CPI rose 0.1 percent, matching analysts' expectations. Gasoline costs rose 9.6 percent in May, but they were still much lower than last year, when prices surpassed $4 a gallon (3.8 liters) during the summer. Food prices fell for the fourth consecutive month. Separately, the Commerce Department reported Wednesday that the U.S. current-account deficit shrank to $101.5 billion in the first quarter, down 34.5 percent from the fourth quarter of 2008. It was the lowest current-account deficit since the final quarter of 2001, when the country was in the middle of the last recession.
