MercoPress. South Atlantic News Agency

US consumer prices in April remained unchanged

US consumer prices were unchanged in April, but recorded their largest year-on-year drop for more than 50 years, official data showed. Meanwhile producer prices jumped more than expected pushed by the biggest rise in food costs in more than a year.

US Labour Department said the consumer price index was flat last month, but fell 0.7% on April last year - the biggest decline since 1955. Core prices, which exclude food and energy, rose 0.3%, helped by the 1 April rise in federal taxes on tobacco.

But the gains were offset by food and energy prices, which continued to fall.

The food index fell 0.2%, while energy prices declined 2.4%. In March, consumer prices dropped 0.1%.

However April producer prices rose by 0.3% compared with the previous month, as an increase in the cost of food of 1.5% offset a fall in energy prices of 0.1%.

But prices stood 3.7% lower than they did a year earlier, according to the figures from the US Labour Department.

In March, producer prices fell by 1.2% leading to fears of accelerating deflation.

The April rise in food prices was the largest monthly gain since January last year.

The price of eggs, for example, rose by 43.7%.

The return of modest price inflation is generally seen as positive for the economy.

Extended periods of deflation, or falling prices, can be very damaging as consumers postpone purchases until they become cheaper.