US consumer prices dropped 0.1% in August, the first decline in nearly two years as energy costs fell in a sign that a slowing global economy is relieving some inflation pressures.
The August decline in the consumer price index was in line with forecasts by Wall Street economists and followed a 0.8% July jump, a Labor Department report showed.
Excluding volatile food and energy items, the core consumer price index rose 0.2%, down from a 0.3% July rise. That also matched forecasts.
On a year-over-year basis, overall consumer prices rose 5.4% - a moderation from the 5.6% year-over-year rise in July - and core prices were up 2.5%, the same as in July.
Energy costs tumbled 3.1% in August, the biggest drop since October 2006, after rising 4% in July. Housing costs were down 0.1% last month, the first decline since early 2003, after climbing 0.6% in July.
Transportation costs declined 1.5% after a 1.7% rise in July as petrol prices dropped by 4.2%.
