Led by a 5.6% drop in energy prices, U.S. consumer prices fell 0.3% in July, marking only the second drop in 15 years, the Dept. of Labor said today. The only other drop in the Consumer Price Index (CPI) since April 1986 came last April.
The drop in energy prices, which is also the largest since April 1986, accounted for much of the good inflation news for July. That came on top of a 0.9% decline in energy prices in June.
Gasoline prices plummeted 11% in July, while Natural gas prices, which posted a record decline in June, fell 4.1% in July. Home-heating oil went down 2.8%.
The Labor Department also cited a fall in clothing and computer costs to the drop in the CPI. Retailers have cut prices to clear out unsold seasonal merchandise.