Falling Gas Prices Slow Rise in US Consumer Costs

Posted June 15th, 2011 at 3:45 pm (UTC-5)
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Falling gas prices helped slow the U.S. inflation rate last month.

Wednesday's report from the Labor Department says overall consumer prices rose two-tenths of a percent in May, which is less than the prior month. The first drop in energy prices in nearly a year helped ease inflation. From a year earlier, consumer prices rose by 3.6 percent — the biggest one-year increase since October 2008.

Outside the volatile areas of energy and food, prices in the overall economy rose three-tenths of a percent last month, and 1.5 percent over the past year. Experts say the U.S. central bank is trying to keep these so-called “core” prices from growing faster than about 2 percent a year.

Officials at the U.S. Federal Reserve have said the recent rise in food and gas prices will probably not last long enough to spark inflation in the larger economy. The Federal Reserve fights inflation by raising interest rates to slow economic activity.