Consumer prices in the U.S. decreased in line with economist estimates in the month of April, according to a report released by the Labor Department on Tuesday.
The Labor Department said its consumer price index slid by 0.8 percent in April after falling by 0.4 percent in March.
The drop by the index, which matched economist estimates, reflects the largest monthly decline since December of 2008.
Gasoline prices led the way lower, plummeting by 20.6 percent in April after tumbling by 10.5 percent in the previous month.
The nosedive in gasoline prices contributed to another steep drop in energy prices, which plunged by 10.1 percent in April after slumping by 5.8 percent in March. Energy prices saw their largest monthly decrease since November of 2008.
However, the collapse in energy prices was partly offset by a 1.5 percent spike in food prices, with prices for food at home soaring by 2.6 percent to record the biggest monthly increase since February of 1974.
Michael Pearce, Senior U.S. Economist at Capital Economics, said the jump in prices for food at home “reflects the big rise in demand for groceries, as well as virus-related supply chain disruptions, especially at meat processing plants.”
Excluding food and energy prices, core consumer prices fell by 0.4 percent in April after edging down by 0.1 percent in March. Economists had expected core prices to dip by 0.2 percent.
The drop in core prices was the biggest on record dating back to 1957 and reflected sharply lower prices for apparel, motor vehicle insurance, airline fares, and lodging away from home.
Compared to the same month a year ago, consumer prices in April were up by just 0.3 percent, reflecting the slowest annual growth since October of 2015.
The annual rate of growth on core consumer prices also slowed to 1.4 percent in April from 2.1 percent in March, showing the smallest increase since April of 2011.
“With demand still exceptionally weak, we expect further declines in the coming months,” said Pearce. “But further ahead, as demand begins to recover while supply for some goods and services remains limited by social distancing regulations, the virus impact could tilt from being deflationary to inflationary.”
On Wednesday, the Labor Department is scheduled to release a separate report on producer prices in the month of April.
Producer prices are expected to drop by 0.5 percent in April after dipping by 0.2 percent in March, while core producer prices are expected to come in unchanged after inching up by 0.2 percent.