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Economic indicators say grip of recession easing

WASHINGTON — Consumer prices were flat in April, while industrial production fell by the smallest amount in six months — further evidence that the recession's grip is slowly easing.

The disappearance of inflation has been a product of the country's deep recession as surging job layoffs dampen wage pressures and weak consumer demand keeps a lid on price increases.

Some economists are worried about a dangerous bout of falling prices, but most say that possibility remains remote because the Federal Reserve has responded with force to combat the current downturn.

The Labor Department said today its Consumer Price Index was flat last month after dipping 0.1 percent in March, meeting economists' expectations. The docile inflation performance reflected a second monthly drop in energy costs and a third straight decline in food prices.

Over the past year, consumer prices have fallen 0.7 percent, the largest 12-month decline since a similar drop for the 12 months ending in June 1957.

A destabilizing period of falling prices has not been seen in the U.S. since the Great Depression of the 1930s, although Japan suffered through a period of deflation in the 1990s.

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