May 31, 5:46 AM EDT

Official figures show that consumer prices across the 19-country eurozone fell in May for the third month in four



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Consumer prices across the 19-country eurozone fell in May for the third month in four

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Consumer prices across the 19-country eurozone fell in May for the third month in four

Official figures show that consumer prices across the 19-country eurozone fell in May for the third month in four

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LONDON (AP) -- Consumer prices across the 19-country eurozone fell in May for the third month in the last four, official figures showed Tuesday, a development that's unlikely to alter expectations that the European Central Bank will refrain from announcing more stimulus measures this week.

Eurostat, the European Union's statistics agency, said inflation in the year to May was minus 0.1 percent, up slightly from the previous month's rate of minus 0.2 percent. The modest increase was anticipated in the markets following a rise in German inflation during the month.

Inflation across the eurozone has been below zero at various moments over the past year and a half due to a combination of factors, largely connected to the weakness of the economy, which keeps wage increases subdued. But crucially, the sharp fall in energy and raw material prices over that period has weighed on consumer prices. In May, sharply lower energy prices - down an annual 8.1 percent - were once again behind the negative rate.

When energy costs are stripped out, alongside other supposedly volatile items such as food, tobacco and alcohol, so-called core inflation was 0.8 percent in the year to May, slightly up from the previous month's rate of 0.7 percent.

Whichever measure is used, inflation in the eurozone remains at historically low levels and that's a worry for those setting monetary policy. The ECB's primary goal is to maintain a headline inflation rate just below 2 percent, but it's been below target since February 2013.

A prolonged drop in prices can weigh heavily on an economy, as Japan's experience over the past quarter of a century can testify to. So-called deflation can become a vicious cycle and push prices down further. Falling prices could prompt consumers to delay purchases and businesses to shy away from investments.

Over the past few months, the ECB has grown more aggressive in its policymaking in order to push up inflation. It has slashed interest rates, including its main refinancing rate to zero, and expanded its bond-buying program. And it's indicated it could do more in the future. By keeping interest rates low and pumping money into the economy via its bond-buying program worth over a trillion euros, the ECB is hoping to generate enough economic activity to get prices rising.

However, few experts expect any further action at this Thursday's policy meeting of the ECB's governing council, largely because the more recent stimulus efforts are still working their way through the economy.

Separately, Eurostat said unemployment in the eurozone held steady at 10.2 percent in April even though 63,000 people came off the jobless total, which now stands at 16.42 million.

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