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Consumer prices dropped in March by the largest amount in more than 2 years

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Consumer prices fell in March by the largest amount in more than two years, pushed lower by another sharp decline in the price of gasoline and other energy products.

The Labor Department says the U.S. Consumer Price Index dropped 0.3 percent in March following a tiny 0.1 percent rise in February. It was the first monthly decline in 13 months and the biggest drop since prices fell 0.6 percent in January 2015. In addition to a big 6.2 percent fall in gasoline prices, the cost of cellphone plans, new and used cars and clothing were all lower last month.

Core inflation, which excludes volatile food and energy, dropped 0.1 percent last month. Over the past 12 months, inflation is up a moderate 2.4 percent while core prices have risen 2 percent.

In a note Friday morning, Barclays characterized the CPI figure as "much weaker than expected."

The bank cut its first-quarter GDP estimate to 0.8 percent following the report, citing the inflation numbers, as well as weak retail and inventory data. The new figure is two-tenths below the Barclays' estimate prior to Friday's data.

—The Associated Press contributed to this report.