Consumer inflation registers the largest decline in April since 2008 as prices plunge, according to the CPI

The drop in gasoline prices caused the drop, the government said Tuesday. Stay at home orders have kept Americans off the road and reduced the need for fuel. However, prices also fell in record quantities for a variety of other goods and services, as companies lowered their prices in the face of falling demand.

The rate of inflation in the past 12 months has slowed to 0.3% from 1.5% in March and 2.5% in early 2020, which shows that the crisis is putting strong pressure on the Lower prices despite an infusion of Federal Emergency Aid of $ 3 billion to support the economy.

Watch: MarketWatch economic calendar

What happened: Gasoline prices generally start to rise in April before the summer driving season. Not this year. Almost 21% fell last month due to the pandemic and the price war between Saudi Arabia and Russia.

In many parts of the country, a gallon of regular gasoline now costs less than $ 2.

Clothing, auto insurance, warm rooms and airline tickets saw record price declines. Passenger fares lowered prices by 15%, as airport traffic fell more than 90%.

The prices of some goods in great demand during the crisis have increased. The cost of food increased 2.6%, with Americans eating more at home. Certain products such as beef and pork were also in short supply due to viral epidemics in meat packing plants.

Rents and medical costs have also increased.

Another closely watched inflation measure that cuts food and energy fell 0.4% last month. This is the first consecutive drop in the so-called base rate in 37 years.

The annual increase in the so-called base rate decreased to 1.4% compared to 2.1%.

Overview: Inflation is going down like almost everything else and shouldn't be a problem for a long time despite the heaps of new public spending and debt.

Too many buyers are unlikely to chase too few goods, a classic sign of inflation, until the economy fully recovers. Most economists believe that this day is several years away. The Federal Reserve is expected to maintain a key interest rate at or near zero until then.

Read: Why is the recovery in the coronavirus economy likely to be long and painful?

What do they say? "This is a deflationary shock," said Aneta Markowska, chief financial economist for the Jefferies group and latest MarketWatch forecaster of the month.

Read:It’s wishful thinking that the economy will return to normal soon, says MarketWatch Forecaster of the month winner

Market reaction: Dow Jones industrial average
DJIA
-0.44%

and S&P 500
SPX
+ 0.01%

They were to open a little higher in Tuesday's operations.