WASHINGTON — Consumer prices in the United States dipped unexpectedly in March, leaving prices over the past year falling at the fastest clip in more than a half-century. The recession is expected to keep a lid on inflation as widespread layoffs dampen wage pressures and weak demand keeps companies from raising prices.
The U.S. Labour Department said Wednesday that consumer prices edged down 0.1 per cent last month as a drop in energy prices offset the biggest rise in tobacco prices in more than a decade. It was a better performance than the 0.1 per cent rise in the Consumer Price Index that economists had expected.
Over the past 12 months, consumer prices have fallen 0.4 per cent, the first 12-month decline since a similar drop for the year ending in August 1955.
Meanwhile, the Federal Reserve said Wednesday its latest survey of business conditions nationwide found five of its 12 regional banks reported a moderation in the pace of the economic decline. The Fed said several regions “saw signs that activity in some sectors was stabilizing at a low level . . . (but) overall economic activity contracted further or remained weak.”
The Fed also reported that production at the nation’s factories, mines and utilities dropped a seasonally adjusted 1.5 per cent in March, the fifth straight monthly decline. That matched February’s drop and was worse than the one per cent dip analysts expected.
Factories and mines are increasingly idle, as the total industrial capacity utilization rate fell to 69.3 per cent from 70.3 per cent, the lowest on records dating to 1967, the Fed said.