16 May 2003, 18:02  US consumer prices decline in April

Consumer prices in the US fell at their fastest pace in 18 months in April as the US economy showed little sign of picking up momentum. Inflation, as measured by the consumer price index, declined 0.3pc in April after a 0.3pc increase in March, the Labour Department said. On a year-on-year basis, the inflation rate rose 2.2pc. The sharper than expected monthly decline, which was largely due to falling gasoline and energy prices, will stoke fears of deflation in the world's largest economy.
In its policy statement on 6 May, the US Federal Reserve did not mention the "d" word, but it did warn that the probability of an "unwelcome substantial fall in inflation" was greater than that of a pickup in inflation "from an already low level". The so-called core rate of inflation, which excludes volatile food and energy costs, was unchanged for a second month. This is the first time that the core rate has failed to rise in back to back months since November-December 1982. Economists had forecast a decline of 0.1pc in the headline rate and an increase of 0.2pc in the core rate. //www.fxcentre.com

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