Labor Dept. says inflation declined in March, lowest in 6 months

U.S. inflation declined last month as the cost of gas fell, a sign that price growth was cooling.

Consumer prices rose just 2.4% in March from a year earlier, the Labor Department said Thursday, down from 2.8% in February. That is the lowest inflation figure since September.

Excluding the volatile food and energy categories, core prices rose 2.8% compared with a year ago, down from 3.1% in February. That is the smallest increase in core prices in nearly four years. Economists closely watch core prices because they are considered a better guide to where inflation is headed.

On a monthly basis, prices actually fell 0.1% in March, the first monthly drop in nearly five years. 

The cost of used cars, car insurance, and hotel rooms all fell. Core prices rose just 0.1% in March from February.



(AP Photo Nam Y. Huh)