[WASHINGTON] US import prices fell in January for a seventh straight month as the cost of petroleum products continued to decline and a strong dollar undercut prices for a range of goods, pointing to weak inflation in the near term.
The Labor Department said on Friday import prices dropped 1.1 per cent last month after a revised 1.1 per cent decrease in December. Import prices have decreased in 17 of the last 19 months, reflecting a robust dollar and plunging oil prices.
Economists had forecast import prices tumbling 1.4 per cent after a previously reported 1.2 per cent fall in December.
Import prices fell 6.2 per cent compared to January 2015. The dollar has gained 21 per cent against the currencies of the United States' main trading partners since June 2014. US oil prices were near 12-year lows this week.
The oil price weakness is contributing to keeping inflation below the Federal Reserve's 2 per cent target.
Weak inflation and a sell-off of global equities have tightened financial market conditions. The darkening global economic outlook could make it harder for the US central bank to raise interest rates this year.
The Fed increased its key short-term interest rate in December, the first hike in nearly a decade.
Imported petroleum prices dropped 13.4 per cent in January after tumbling 9.2 per cent in December. Import prices excluding petroleum slipped 0.2 per cent after falling 0.4 per cent in the prior month.
Imported food prices rose 0.6 per cent last month, while prices for industrial supplies and materials excluding petroleum fell 1.4 per cent.
Prices for imported capital goods fell 0.2 per cent and the cost of imported automobiles rose 0.2 per cent.
The report also showed export prices dropped 0.8 per cent in January after sliding 1.1 per cent in December. Export prices were down 5.7 per cent from a year ago.