Philadelphia-area prices for food eaten at home fell 2.0 percent in May, more than reversing a big rise in April, the U.S. Bureau of Labor Statistics said yesterday.

The price drop last month came from cereals, fresh vegetables, and eggs, and it offset price increases for processed fish and seafood, canned fruits and vegetables, and uncooked beef steaks.

In April, the bureau's food-at-home category rose 1.1 percent in the Philadelphia area.

Local energy prices increased 3.0 percent last month, dominated by an 8.1 percent rise in the cost of gasoline at the pump, BLS said. Gasoline prices have been increasing in recent months nationally - to an average of $2.68 a gallon yesterday, AAA Mid-Atlantic said. That is 37 cents a gallon more than a month ago.

May was the fourth straight month of higher gasoline prices, but they still were 40 percent below the year-ago level, the BLS report said.

Even with last month's increase, overall energy prices in the Philadelphia area were 23 percent lower than they were in May last year, BLS regional commissioner Sheila Watkins said. That was the largest drop in energy costs for any 12-month period since the bureau began keeping figures in December 1977.

The local area consists of Philadelphia and its four suburban counties in Pennsylvania, South Jersey from Burlington County to the Shore, New Castle County in Delaware, and Cecil County in Maryland.

The regional data came as the bureau released its May nationwide inflation report, which showed that consumer prices rose less than expected during the month. In fact, from May 2008 to last month, prices posted the steepest annual drop in 59 years, fresh evidence that the recession is keeping inflation in check.

Low prices will make it easier for the Federal Reserve at its meeting next week to keep a key short-term interest rate near zero, where it has been since December.

Still, as higher government spending pushes this year's federal budget deficit toward a record of nearly $1.85 trillion, many economists warn that inflation could be a threat in two to three years.

"Inflation may be coming, but it's not here yet and likely won't be for some time," Richard Moody, chief economist at Forward Capital, wrote in a note to clients.

The BLS said the Consumer Price Index rose a seasonally adjusted 0.1 percent last month, below analysts' expectations of a 0.3 percent rise.

Excluding volatile food and energy costs, core prices also increased 0.1 percent, matching expectations.

The recession is holding down prices as the unemployment rate has reached a 25-year high and factories are operating at record-low levels. Workers concerned about their jobs are less likely to push for higher pay, while low consumer demand has made it difficult for companies to raise prices.

Gasoline prices nationally rose 9.6 percent in May, the bureau said. They are still lower than last year, when prices at the pump topped $4 a gallon during the summer.

Because of that decline, consumer prices fell 1.3 percent in the 12 months ended in May, the steepest drop since 1950.