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US import prices fall for eighth straight month
[WASHINGTON] US import prices fell in February for an eighth straight month, weighed down by declining costs for petroleum and a range of other goods, but the pace of decline is slowing as the dollar's rally fades and oil prices stabilize.
The Labor Department said on Friday import prices slipped 0.3 per cent last month after a revised 1.0 per cent decrease in January. Import prices have decreased in 18 of the last 20 months, reflecting a robust dollar and plunging oil prices.
They were down 6.1 per cent in the 12 months through February. That was the smallest year-on-year drop since December 2014.
Economists polled by Reuters had forecast import prices slipping 0.6 per cent last month after a previously reported 1.1 per cent fall in January.
The import deflation is likely close to an end as the dollar's appreciation loses some steam after gaining roughly 20 per cent against the currencies of the United States' main trading partners between June 2014 and December 2015.
So far this year, the dollar has strengthened about 0.9 per cent on a trade-weighted basis. At the same time, oil prices have also shown tentative signs of stabilizing. Should these trends continue, import prices could start to rise soon and help to prop up domestic inflation.
Reports last month showed a broad pick-up in prices in January, raising optimism inflation will rising toward the Federal Reserve's 2 per cent target and allow the US central bank to continue to gradually raise interest rates this year.
The Fed increased its key overnight interest rate in December for the first time in nearly a decade.
Last month, imported petroleum prices fell 4.0 per cent after plummeting 14.3 per cent in January. Import prices excluding petroleum dipped 0.1 per cent after being unchanged in January.
Imported food prices fell 2.0 per cent last month, the largest drop since February 2012, while prices for industrial supplies and materials excluding petroleum slipped 0.3 per cent. Prices for imported capital goods were unchanged and the cost of imported automobiles fell 0.1 per cent.
The report also showed export prices fell 0.4 per cent in February after sliding 0.8 per cent in January. Export prices were down 6.0 per cent from a year ago.