Washington, March 29: A key US inflation measure dropped sharply in January due to plunging energy costs, the Commerce Department reported Friday.

The cost for energy goods and services fell 6.4 percent at the start of the year, compared to January 2018, dragging the Federal Reserve's preferred inflation index down to 1.4 percent year-over-year, four tenths lower than the December rate.

That was the lowest annual inflation rate since September 2016.

Even excluding volatile energy and food components, the PCE price index — based on personal consumption expenditures — slowed to 1.8 percent year-over-year, once again dropping below the Fed's 2 percent target.

(AFP/APP)

27089