U.S. Import Prices Drop

Washington, Rabi’I 14, 1438, Dec 13, 2016, SPA — U.S. import prices fell by the most in nine months in November on declining petroleum prices, with renewed strength in the U.S. dollar threatening to keep imported inflation tame, the government reported Tuesday.
The Labor Department said import prices fell 0.3 percent last month after a 0.4 percent increase in October. The November decline was the largest since February and followed two consecutive months of increases.
Imported petroleum prices fell 4.7 percent in November, also the biggest drop since February, after surging 7.3 percent the previous month. That offset a 10.6 percent jump in imported natural-gas prices.
Import prices excluding petroleum were flat after falling 0.1 percent in October. The cost of imported food rose 1.5 percent, prices for imported capital goods fell 0.2 percent, while the cost of imported automobiles decreased 0.1 percent.
In the 12 months through November, import prices fell 0.1 percent, the smallest decrease since mid-2014, after falling 0.3 percent in the 12 months ending in October.
The dollar’s surge against the currencies of the main U.S. trading partners between mid-2014 and early 2016 resulted in imported deflation, helping to keep inflation below the Federal Reserve’s (Fed’s) 2-percent target.
But with oil prices hovering around $50 a barrel and wages expected to accelerate as the labor market nears full employment, some of the dollar’s drag on price pressures could be relieved, allowing inflation to rise toward its target.
The report also showed export prices decreasing 0.1 percent in November after rising 0.2 percent the previous month. Export prices were down 0.3 percent from a year ago, the smallest decline since mid-2014, following a 1 percent 12-month decline in October.
Agricultural exports increased 0.6 percent last month, driven by a 1.5 percent jump in vegetable prices. But prices for industrial supplies and materials exports fell 0.3 percent.
18:46 LOCAL TIME 15:46 GMT