Consumer Prices Fall For Third Straight Month Despite Soaring Grocery Prices

TEWKESBURY, UNITED KINGDOM - JULY 23: A mother and her son look at the empty bakery shelves in a supermarket on July 23 2007 in Tewkesbury, England. Flooding has caused wideswept disruption across the country with further regions braced for more floods. (Photo by Matt Cardy/Getty Images)
Photo by Matt Cardy/Getty Images

U.S. consumer prices tumbled once again in May as demand fell amid the coronavirus pandemic recession.

The Labor Department said on Wednesday its consumer price index fell 0.1 percent last month after plunging 0.8 percent in April and 0.2 percent in March.

In the 12 months through May, the index gained 0.1 percent, which represented a decline from the 0.3 percent April figure and March’s 1.5 percent.

Economists forecast the CPI unchanged for the month and a 0.2 percent annual increase.

The indexes gauge for food consumed at home rose 1 percent following a 2.6 percent gain in April, as many Americans required to stay home increased their grocery spending and some products experienced temporary shortages. Compared with a year ago, grocery prices are up 4 percent.

Surprisingly, the index for eating out also rose, albiet by a more modest 0.4 percent. Food prices at “limited service” venues were up 0.6 percent, as Americans turned to drive-through and pick-up only outlets, while food at full-service restaurants rose 0.2 percent following a similarly sized decline in April

But these prices gains were more offset by declines in the indexes for motor vehicle insurance, energy, and apparel. The gasoline index declined 3.5 percent in May, leading to a 1.8-percent decline in the energy index.

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