Official figures show that US consumer prices fell in June for the first time in a year as a sharp decline in oil prices eased inflation pressures.
Consumer prices dropped a seasonally adjusted 0.2% in June from May, the Labor Department said. The retreat in consumer inflation was much stronger than expected by analysts.
Petrol prices led the decline in the energy price index, diving 6.8% from May. 'While this decrease was the major factor in the seasonally adjusted decline in the all items index, the index for household energy declined as well,' the Labor Department said.
Energy prices plunged 4.4% last month, the steepest decline since December 2008. US consumers also got some relief from rising food prices. The food index climbed 0.2%, the smallest increase of the year.
Core inflation, which excludes food and energy prices that can be volatile month-to-month, rose 0.3% for the second straight month.
The annual inflation rate was 3.6%, with a core inflation rate of 1.6%, its highest level since January 2010.
Meanwhile, US consumer confidence plummeted to its lowest level in more than two years in early July.
The Thomson Reuters/University of Michigan's index of consumer sentiment slipped to 63.8 in July, the lowest since March 2009, as households worried about declining wages and rising unemployment, data showed today, from 71.5 in June.
Economists had expected the index to climb to 72.5
