ARLINGTON, Va.—On a seasonally-adjusted basis, overall consumer prices fell 0.8% in April, the second decline in a row and largest one-month drop since December 2008. The Bureau of Labor Statistics reported that the overall consumer price (CPI) grew by 0.4% over the 12-month period.
"The energy index has now fallen for four consecutive months, driven by a collapsed oil market and reduced demand for transport fuels," said NAFCU Chief Economist and Vice President of Research Curt Long.
Energy prices plummeted 10.1% during the month, following a 5.8% decline in March. From a year ago, energy prices were down 7.3%. Food growth was up 3.5% on a year-over-year basis.
"It is important to remember that the CPI uses fixed weights based on spending patterns of consumers in December," Long added. "However, consumers are shifting spending away from areas where prices are falling (gas, clothing, airfare) and into those areas where prices have risen (food for home consumption)."
Core prices, excluding food and energy costs, declined 0.4% in April, representing the largest drop since the start of the data series in January 1957. Year-over-year core CPI growth was 1.4%.
"Official rates of inflation will continue to drop due to collapsing demand, but the true impact on household finances is more ambiguous," Long concluded.