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US import prices resume downward trend in March
[WASHINGTON] US import prices fell in March as rising petroleum costs were offset by declining prices for other goods, a sign of muted inflation that supports the view the Federal Reserve will probably not raise interest rates in June.
The Labour Department said on Friday import prices dropped 0.3 per cent last month after a downwardly revised 0.2 per cent gain in February.
Economists polled by Reuters had forecast import prices slipping 0.3 per cent after a previously reported 0.4 per cent increase in February, when prices advanced for the first time after declining for seven straight months.
In the 12 months through March, prices plunged 10.5 per cent, the largest drop since September 2009.
Lower crude oil prices and a buoyant dollar have dampened price pressures, leaving inflation running well below the Fed's 2 per cent target.
Officials at the central bank, some of whom have shown a willingness to consider a rate hike at the June policy-setting meeting, view the low inflation environment as transitory.
But the combination of low inflation and weak economic growth in the first quarter has prompted many economists to push back their rate hike expectations to later in the year.
And some economists believe monetary policy tightening will only begin in 2016. The Fed has kept its key short-term interest rate near zero since December 2008.
Last month, imported petroleum prices rose 0.8 per cent after jumping 5.2 per cent in February.
Import prices excluding petroleum fell 0.4 per cent in March. They had dropped 0.3 per cent in February. Imported food prices fell 1.1 per cent after being unchanged in February.
The report also showed export prices edged up 0.1 per cent last month after slipping 0.2 per cent in February. Export prices declined 6.7 per cent in the 12 months through March, the largest drop since July 2009.