Coronavirus Leads to Biggest Consumer Price Drop Ever
May 12, 2020
The prices that Americans pay for everyday purchases, from groceries to clothes to automobiles, fell more in April than any other month dating back to 1957.
The “core” price index (CPI), which does not include volatile categories like energy, fell 0.4% last month, the biggest monthly drop since records began being kept.
The drop was felt across the board, but transportation and apparel were the hardest hit, both seeing prices fall 4.7%.
There were substantial price gains in certain sectors, most notably food. Food at home prices jumped 2.6%, and the index that tracks cereal and bakery goods climbed 2.9%, the largest monthly increase on record.
Economists expect inflationary pressure to remain low until normal economic activity recovers. Some argue that the massive fiscal stimulus enacted in response to the crisis could drive prices up, but that will not happen until demand returns, which could still be months or even years from now.