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US import prices post second monthly drop on weak petroleum costs
[WASHINGTON] US import prices fell for a second straight month in June amid further declines in the cost of petroleum products, suggesting inflation pressures could remain benign for a while.
The Labor Department said on Tuesday that import prices decreased 0.2 per cent last month after an upwardly revised 0.1 per cent decline in May.
Economists had forecast import prices slipping 0.2 per cent in June after a previously reported 0.3 per cent drop in May.
In the 12 months through June, import prices increased 1.5 per cent. That was the smallest gain since last November and followed May's 2.3 per cent increase.
The year-on-year increase in import prices has slowed sharply since posting 4.7 per cent in February, which was the biggest advance in five years.
US financial markets were little moved by the report, which came on the heels of data last week showing consumer prices unchanged in June and the annual CPI rate increasing 1.6 per cent - the smallest rise since October 2016.
Low oil prices are largely curbing both domestic and imported inflation pressures. Other factors such as declining prices for mobile phone services have also contributed to pushing inflation below the Federal Reserve's two per cent target.
Fed Chair Janet Yellen told lawmakers last week that the recent ebb in inflation was partly the result of "a few unusual reductions in certain categories of prices" that would eventually drop out of the calculation.
Persistently low inflation will likely have an impact on the timing of a third interest rate increase this year from the US central bank, which most economists expect would be in December.
Last month, prices for imported petroleum fell 2.2 per cent after decreasing 1.2 per cent in May. Imported petroleum prices have not risen since gaining 0.8 per cent in February.
Import prices excluding petroleum edged up 0.1 per cent after being unchanged the prior month. Import prices excluding petroleum increased 1.4 per cent in the 12 months through June.
Prices for imported capital goods rose 0.2 per cent, the largest increase since May 2014. Imported motor vehicle prices fell 0.2 per cent, while the cost of imported food increased 0.9 per cent.
The report also showed export prices dropped 0.2 per cent in June as falling vegetable, soybeans and fruit prices weighed on agricultural exports. Export prices fell 0.5 per cent in May.
They rose a modest 0.6 per cent year-on-year, the smallest gain since prices started rising in December, curbed by lower export prices for soybeans, fruit and corn. Export prices gained 1.5 per cent in the 12 months through May.