Imports fall in US for eighth month

  • 12/03/2016

US import prices have fallen in February for an eighth straight month, weighed down by declining costs for petroleum and a range of other goods.

The Labor Department said on Friday (local time) import prices slipped 0.3 percent last month after a 1.0 percent 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 percent in the 12 months through February, the smallest year-on-year drop since December 2014.

Weak import prices have contributed to holding inflation below the Federal Reserve's 2 percent target.

"We strongly feel that the peaks in both overall and core disinflation pressures are behind us," said John Ryding, chief economist at RDQ Economics in New York.

The import deflation is likely close to an end as the dollar's appreciation loses some steam after the greenback gained about 20 percent 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 percent on a trade-weighted basis. At the same time, oil prices have also shown tentative signs of stabilising. Should these trends continue, import prices could start to rise soon and help to push up domestic inflation.

"Prospects of higher oil prices and slower dollar appreciation should help keep this improving trend intact," said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

Reports last month showed a broad pick-up in prices in January, raising optimism among economists that inflation will rise toward the Fed's target and allow the US central bank to continue gradually raising interest rates this year.