US Inflation Continues To Drop In May, But At Slower Pace

US inflation edged down again in May, but at a slower rate than the prior month as price drops moderated in some sectors, the Labor Department said Wednesday.

The consumer price index declined 0.1 percent last month, less than analysts expected but a sign that shoppers are continuing to hold back as the world's largest economy grapples with disruptions from the coronavirus pandemic.

CPI excluding food and energy declined by 0.1 percent, its third straight monthly drop -- the first time that has ever happened.

The data "continue to underscore that the fallout from the coronavirus is having a large disinflationary effect on prices due to the large demand shock, plunge in oil prices and (the) still-strong dollar," Oxford Economics said in a note.

The scant inflation also will reinforce the Federal Reserve's willingness to pump liquidity into the economy to insulate it from shocks caused by the pandemic, since there are no signs that policy is boosting prices as it would be expected to do in a healthy economy.

The continued drop in gasoline prices, which fell by 3.5 percent, helped drive CPI lower, along with apparel, which dropped 2.3 percent, and airlines fares, which fell 4.9 percent.

However all three slowed their rate of decline from April.

Meanwhile, food prices, which increased 0.7 percent overall, helped keep CPI from falling further with the index for food at home rising 1.0 percent.