Import prices fall; lower oil prices to help households

WASHINGTON Tue May 14, 2013 8:36am EDT

A cargo ship is anchored outside the Port of Long Beach, California December 4, 2012. REUTERS/Mario Anzuoni

A cargo ship is anchored outside the Port of Long Beach, California December 4, 2012.

Credit: Reuters/Mario Anzuoni

WASHINGTON (Reuters) - Import prices fell in April due to a drop in oil costs, a positive sign for household finances that also pointed to benign inflation pressures.

Import prices slipped 0.5 percent last month, the biggest decline since December, the Labor Department said on Tuesday. March's data was revised to show a 0.2 percent decline instead of the previously reported 0.5 percent drop.

Economists polled by Reuters had expected prices to fall 0.5 percent last month. In the 12 months to April, import prices fell 2.6 percent.

Stripping out petroleum, import prices dipped 0.1 percent.

The tame inflation environment should allow the Federal Reserve to stay on its ultra-easy monetary policy course as it tries to nurse the economy back to health.

At its policy meeting earlier this month the central bank decided to continue buying $85 billion worth of bonds every month to push long-term interest rates downward.

At the same time, the economy has lately shown signs of resilience despite austerity measures enacted this year by Washington.

The National Federation of Independent Business said on Tuesday its gauge of confidence for small U.S. businesses rose in April to its highest in six months.

Lower oil prices are also helping household finances. The United States imports much of the fuel it consumes. Last month, imported petroleum prices fell 1.9 percent.

The Labor Department report also showed export prices fell 0.7 percent last month, the largest decline since June.

(Reporting by Jason Lange; Editing by Andrea Ricci)

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Comments (5)
moonhill wrote:
I would like to know where the lower gasoline prices are, because they have been going up like crazy where I live.

May 14, 2013 10:02am EDT  --  Report as abuse
COindependent wrote:
@ moonhill. You are correct. Where you live is definitely a determinant. If you live in on either the West or East coast, your fuel is produced in states with high tax rates on fuel and the fact that your source crude is priced at international levels, then you are going to pay more.

May 14, 2013 12:57pm EDT  --  Report as abuse
1WorldDone wrote:
moonhill and COindependent: Same for me. Gas prices have risen 26 cents in my state in the last 2 weeks alone! 38 cents in the last month!

But I would add that Brent crude prices have fallen about 10% this year, not just WTI pricing. So prices should be trending downward, not upward.

Demand for gasoline in down here year-over-year.

Inventories at Cushing are at the highest levels in history.

This should be pointing to lower prices, not higher…

May 14, 2013 1:42pm EDT  --  Report as abuse
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