WASHINGTON — An 8.1 percent plunge in the cost of gasoline drove down a measure of US consumer prices last month by the most since December 2008. Excluding the drop in fuel costs, however, prices were largely unchanged.
The consumer price index fell 0.4 percent in April from March, the Labor Department said. For the 12 months that ended in April, overall prices rose 1.1 percent — the smallest year-over-year increase in 2½ years.
Excluding volatile energy and food costs, ‘‘core’’ prices ticked up 0.1 percent last month. Core prices have risen 1.7 percent in the past 12 months. That’s just below the Federal Reserve’s 2 percent inflation target.
Scant inflation lets the Fed continue its efforts to stimulate the economy. Worries about lower inflation or even deflation might push the Fed to step up its low-interest-rate policies to stimulate more borrowing and spending and push prices higher. Deflation is a destabilizing cycle in which prices and wages fall; it can slow economic growth.
A little inflation can be good for the economy, because it encourages businesses and consumers to spend before prices rise further. Aside from sharp swings in gas prices, consumer and wholesale inflation has been mild this year.