US consumer prices fell by the most in more than five years in March and further decreases are likely as the coronavirus outbreak suppresses demand for some goods and services, offsetting price increases related to shortages resulting from disruptions to the supply chain.
The Labor Department said on Friday its consumer price index dropped 0.4 percent last month amid a tumble in the costs of gasoline, hotel accommodation, apparel and airline tickets. That was the biggest drop since January 2015 and followed a 0.1 percent gain in February. In the 12 months through March, the CPI rose 1.5 percent after increasing 2.3 percent in February.
Economists polled by Reuters had forecast the CPI dropping 0.3 percent in March and climbing 1.6 percent year-on-year.
Read more: Coronavirus: No return to normal life until the end of 2021, says US expert
Signage regarding the coronavirus disease is displayed at the entrance to the Manhattan Bridge in the Brooklyn borough of New York City, on March 20, 2020. (Reuters)
As a result, the government said many indexes were based on smaller amounts of collected prices than usual, and a small number of indexes that are normally published were not published in March.
Restaurants, bars and other social venues have been shuttered as state and local governments implemented tough measures to control the spread of COVID-19, the respiratory illness caused by the coronavirus. Clothing retailers have also closed shop as have some manufacturers, while transportation has been drastically scaled back, leaving millions unemployed.