US Import Prices Extend Decline on Cheaper Fuel
U.S. import prices fell in November as the cost of petroleum and several goods continued to decline, suggesting that cheaper crude oil and a strong dollar will keep imported inflation pressures subdued for a while.
The Labor Department announced Dec. 10 that import prices dropped 0.4% last month after a revised 0.3% decrease in October. Import prices have declined in 15 of the last 17 months. Economists had forecast import prices falling 0.7% after a previously reported 0.5% drop in October.
In the 12 months through November, prices tumbled 9.4%. Dollar strength and a sharp decline in oil prices have dampened inflation, leaving it running well below the Federal Reserve's 2% target.
But given tightening labor market conditions, tame price pressures are unlikely to prevent the Fed from raising interest rates next week for the first time in nearly a decade. Labor market tightness is expected to spur faster wage growth and gradually push inflation toward its target.
Last month, imported petroleum prices fell 2.5% after rising 0.4% in October. Further weakness is likely following a recent slump in oil prices to seven-year lows.
Import prices excluding petroleum slipped 0.3% after falling 0.4% in October. The dollar has gained 18% against the currencies of the United States' main trading partners since June 2014, making imports less expensive.
In November, imported food prices fell 0.5%, declining for a third straight month. Prices for industrial supplies, excluding petroleum fell 1.0% after a similar drop in October.
Prices for imported capital goods dipped 0.1% and prices for imported automobiles also fell by the same margin. The report also showed export prices decreased 0.6% last month after slipping 0.2% in October. They were down 6.3% in the 12 months through November.
