Jul 13, 2018 06:50 PM IST | Business

US import prices drop the most in over two years

The Labor Department said on Friday import prices dropped 0.4% last month, the largest decline since February 2016.

Data for May was revised to show import prices increasing 0.9% instead of rising 0.6% as previously reported.

US import prices fell the most in more than two years in June as prices for petroleum products fell and a strong dollar weighed on the costs of other goods, pointing to benign import inflation pressures.

The Labor Department said on Friday import prices dropped 0.4% last month, the largest decline since February 2016. Data for May was revised to show import prices increasing 0.9% instead of rising 0.6% as previously reported.

Economists had forecast import prices edging up 0.1% in June. In the 12 months through June, import prices increased 4.3% after advancing 4.5% in May.

Last month, prices for imported petroleum decreased 0.8% after accelerating 7.4% in May. June's drop reflected a decline in crude oil prices.

Excluding petroleum, import prices slipped 0.3% in June, the largest drop in two years, after gaining 0.1% in the prior month. Import prices excluding petroleum rose 1.4% in the 12 months through June.

Last month's decline in import prices excluding petroleum likely reflects the dollar's strength.

The greenback gained 1.6% against the currencies of the United States' main trading partners in June. The dollar has firmed 3.8% on trade-weighted basis so far this year, which could help to offset some of the boost to import prices from tariffs on lumber, steel and aluminum.

Import prices for nonfuel industrial supplies and materials increased 0.3% in June, driven by higher prices for metals and paper, after rising 0.8% in the prior month.

The cost of imported capital goods fell 0.1% for a second straight month. Prices of imported motor vehicles also slipped 0.1% in June after a similar drop in the prior month. The cost of consumer goods excluding automobiles declined 0.3%, the biggest drop since November 2016.

Prices for goods imported from China were unchanged in June after edging up 0.1% in the prior month. They rose 0.5% in the 12 months through June, the largest gain since May 2014.

Imported-food prices dropped 2.6% last month, the biggest decrease since February 2012, after rising 0.4% in May.

The report also showed export prices increased 0.3% in June after advancing 0.6 percent in May. Prices for agricultural products fell 1.0 percent last month, pulled down by a 2.6% drop in soybean prices. Export prices for corn tumbled 3.1%

Export prices increased 5.3% in the 12 months through June. That was the largest gain since October 2011 and followed a 4.9% rise in April.

Published Date: Jul 13th, 2018 06:50 PM | Updated Date: Jul 13, 2018 06:50 PM IST