Shops on Fifth Avenue are still closed on Monday as New York marks 100 days since the first confirmed case of COVID-19 appeared. On Monday, New York entered Phase One of reopening with manufacturing, wholesale trade and agriculture work allowed to resume operations. Nearly 400,000 people were believed to have returned to work. Photo: cnsphoto

 
US consumer prices fell for a third straight month in May as the COVID-19 fallout continues to ripple through the country, the Labor Department reported on Wednesday.

The consumer price index (CPI) fell 0.1 percent in May after plunging 0.8 percent in April, which was the largest monthly decline since December 2008, according to the department.

Excluding the volatile food and energy categories, the so-called core CPI fell 0.1 percent in May, its third consecutive monthly decline.

"May marked the third consecutive decline in prices -- the first time this has ever occurred -- as efforts to contain COVID-19 dramatically altered consumption habits and weighed heavily on prices in recent months," Sarah House, senior economist at Wells Fargo Securities, wrote Wednesday in a note.

"Consumer demand has likely begun to recover, as lockdowns have started to be lifted. While declines in the CPI due to a pronounced drop in demand are likely behind us, we expect inflation to remain modest over the next year as the economy recovers," House said.

The U.S. National Bureau of Economic Research (NBER) confirmed on Monday that the U.S. economy officially entered a recession in February, ending the longest expansion in U.S. history.

"The unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions," said the NBER, an association of the nation's top economic researchers.

Fallout from the COVID-19 pandemic will shrink the size of the U.S. economy by 7.9 trillion U.S. dollars over the next decade, according to new projections released by the Congressional Budget Office last week.