Official figures show that US consumer prices fell unexpectedly in March to record their first annual drop since 1955. The Labor Department report showed that weaker demand pushed down energy and food costs.
The department said its closely watched Consumer Price Index fell 0.1% after increasing 0.4% in February. Analysts had expected a slight rise.
Core prices, which exclude food and energy, rose 0.2% in the month after rising by the same margin in February. March core prices were lifted by increased costs for tobacco and vehicles.
On an annual basis, consumer prices fell 0.4% in March, the first 12-month decline since August 1955. Core prices rose at an annual rate of 1.8%.
Separate figures from the Federal Reserve showed that US industrial production fell in March for the fifth consecutive month, by 1.5%, to the lowest level in a decade.
The seasonaly adjusted monthly decline matched the revised 1.5% drop in February and was much steeper than the 0.9% decline expected by most analysts.
For the first quarter of the year, industrial output dropped at an annual rate of 20%, the largest quarterly decline 'of the current contraction,' the Fed said. The world's largest economy slid into recession in December 2007.
