Business

US prices fall for a second month

Fuel pump
Image caption Falling fuel costs dragged prices lower

US consumer prices fell for a second straight month in May, after energy prices dropped sharply.

The US consumer price index dropped 0.2% last month, adding to the 0.1% fall seen in April.

May's drop in prices was the biggest monthly decline since December 2008.

But economists said it was unlikely that the trend would result in a dangerous spiral of deflation, as core prices - which strip out energy costs - saw a small rise.

Core prices rose 0.1% in May, while energy prices dropped 2.9% - the biggest monthly drop in a year. Gasoline prices were down 5.2%.

The annual rate of inflation now stands at 2%, meeting the US Federal Reserve's target.