A man buys water, food and toilet paper at a store, as people begin to stockpile essentials over fear that supplies will be affected by the spread of the COVID-19, coronavirus, outbreak across the country, in Los Angeles on Feb. 29, 2020.

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Consumer prices fell 0.4% in March, the largest monthly decline in five years, as Americans stopped traveling and the cost of gasoline, airfares and hotel rooms plummeted.

March’s decline was the biggest since January 2015, according to the Labor Department. It follows a 0.1% gain in February. Energy costs overall slid 5.8%, with gasoline prices tumbling 10.5%. Airfares plunged a record 12.6%, while hotel and motel room prices fell 6.8%.

The core consumer price index, excluding food and energy, fell 0.1% in March, its first monthly decline since January 2010. Consumer prices are up 1.5% over the past year while core inflation has risen 2.1% over the last 12 months.

“In terms of the core measure, the March decline was one of the weakest readings on record, and it was pulled down by record-large drops in the prices of airfares … lodging away from home … and apparel,”  wrote JPMorgan economist Daniel Silver. Apparel prices dropped 2%.

Food prices rose 0.3% in March, after rising 0.4% in February. Dairy and related products rose 0.6%, and is now up 3.7% over the past year. Prices for meat, poultry, fish prices and eggs edged up 0.1% and are up 2.3% for the year while beef is up 3.8% in the past year.

Stephen Stanley, chief economist at Amherst Pierpont, said it’s difficult to tell what the inflation measure will look like for the month of April. States began to issue stay-at-home orders in the final weeks of March, and much of the country is now shut-in through April.

“The headline will certainly be dragged down by oil again, but food prices may be firmer, and there are large parts of the core for which I have no idea. You can only buy apparel at places like Wal-Mart, Target, and Costco or online. You can’t buy a sporting event or movie ticket, get your hair cut, or even go to the dentist,” Stanley wrote in a note.

Stanley said it is unclear what airlines and hotels will do with pricing in the near-term. “And does it even matter, since the price movements in April will be irrelevant to where airfares are in 6 months, a year, and two years? And shouldn’t some items be rising in price? Grocery prices are certainly higher in some categories,” he wrote. “I am assuming that there are items within the core that may see price hikes (e.g. nonprescription drugs?). And is it a price increase that I am still paying full tuition for my kids’ college and they are taking classes online?”

Economists have been struggling to measure what the intentional and abrupt shutdown means to economic measures, and many now expect GDP for the current quarter to contract by a stunning 30% or more. JPMorgan expects a decline of 40% in the second quarter.

Silver said he does not expect those particular declines in airfares and hotels to persist, but he does expect to see soft readings on core inflation continuing due to the weakening economy. Already nearly 17 million workers have filed unemployment claims, and JPMorgan forecasts the economy could lose 25 million jobs in April.

“The spread of COVID-19 clearly has depressed demand for travel and hospitality and is likely responsible for the March drops in prices reported for airfares and lodging away from home,” he wrote. “We think that these large price declines associated with the virus spread will be more of a level adjustment than a persistent drag on inflation, and while prices could continue to adjust over time, we do not expect record-large declines in these categories to continue over a prolonged period of time.”

Before the economic collapse related to the virus, the Fed had been willing to ignore softish inflation. Silver said the core PCE index, the inflation measure most watched by the Fed, is expected to be down 0.045% in March.

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