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A closely tracked measure of US consumer price inflation fell to the lowest level since late 2015 in March, the latest indication that the economy may not have performed as strongly as initially expected in the first quarter.

The so-called core consumer price index, which excludes volatile food and energy prices, fell 0.1 per cent in March from the month prior, the US labour department reported. From a year earlier, the inflation rate dipped to 2 per cent from 2.2 per cent. That was the lowest rate since November 2015, according to Bloomberg data, and far below estimates for a rise to 2.3 per cent.

Meanwhile, the headline index slid 0.3 per cent month-on-month, with the year-on-year rate sliding to 2.4 per cent from 2.7 per cent. Wall Street was expecting the annual rate to come in at 2.6 per cent.

A separate report released on Friday showed that US consumer spending also missed the mark in March. Retail sales excluding the automobile component were flat month on month, compared with estimates for a 0.1 per cent rise, the commerce department said.

Friday’s data further muddy the picture for the US economy’s performance in the first three months of this year. Survey data pointed to optimism both from businesses and consumers, but as more hard data have been released, the outlook has dimmed.

For instance, the Atlanta Federal Reserve’s running forecast was updated last week to project an annualised first quarter growth rate of just 0.6 per cent, from as high as 3.4 per cent in early February.

US fixed income markets were closed for Good Friday, so there was no immediate action. However, a combination of rising geopolitical risk and concern about the economy has knocked the 10-year Treasury yield down by more than 0.3 percentage points over the past five weeks.

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