Consumer Prices Dip In March, Post 1st Annual Drop Since '55

Source: Reuters

WASHINGTON (Reuters) — A key gauge of consumer prices fell unexpectedly in March and recorded its first annual drop since 1955, government data showed Wednesday, as slumping demand pushed down energy and food costs.

The Labor Department said its closely watched consumer price index fell 0.1%, after increasing 0.4% in February. On a year-over-year basis, consumer prices were down 0.4%, the first 12-month decline since August 1955.

"The numbers speak to an economy that is in deep recession, but we're no longer in the shock mode of staggering numbers that speak to a serious slide lower in terms of macroeconomic activity, coupled with the threat of inflation," said Peter Kenny, managing director at Knight Equity Markets.

Separately, industrial production fell an unexpectedly sharp 1.5% in March, Federal Reserve data showed, capping a brutal quarter as businesses pared orders and cut inventory in a deepening recession.

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