* Import prices fall 0.9 percent, largest drop since June
* Prices excluding food, fuels dip 0.1 percent
* Export prices drop 0.7 percent, largest fall since June
By Lucia Mutikani
WASHINGTON, Dec 12 U.S. import prices recorded
the biggest drop in five months in November as food and fuel
costs tumbled, keeping inflation pressures subdued against the
backdrop of a weak economy.
The Labor Department said on Wednesday import prices fell
0.9 percent after three straight months of gains. October's data
was revised to show a 0.3 percent increase rather than the
previously reported 0.5 percent gain.
Economists polled by Reuters had expected import prices to
fall 0.5 percent last month. In the 12 months to November,
import prices fell 1.6 percent.
Stripping out fuels and food prices, import prices dipped
0.1 percent as the cost of capital goods fell by the most since
March 2010 and automobile prices were flat, indicating that
broader inflation pressures remained benign.
"The global economy is restraining prices here and abroad.
This indicates global demand is soft and will remain soft in the
near term," said Gus Faucher, a senior economist at PNC
Financial Services in Pittsburgh.
"This adds to the perception that inflation is not a
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.
The U.S. central bank on Wednesday pledged to keep interest
rates near zero until the unemployment rate fell to 6.5 percent.
It said this commitment would hold for as long as inflation was
projected to be no more than 2.5 percent one or two years ahead
and inflation expectations were contained.
Data on Thursday is expected to show that weak energy costs
depressed wholesale prices in November for a second month in a
row, according to a Reuters survey of economists.
Last month, imported petroleum prices fell 3.6 percent after
slipping 0.2 percent in October. The price of imported natural
gas surged 18.2 percent, the largest increase in three years.
Imported food prices fell 1.3 percent, the biggest decline since
February, after edging up 0.2 percent the prior month.
Elsewhere, imported capital goods prices fell 0.3 percent
after being flat in October. Imported motor vehicle prices were
unchanged after rising 0.3 percent the previous month.
The Labor Department report also showed export prices fell
0.7 percent last month, the largest drop since June. Export
prices were flat in October.
Export prices were last month weighed down by declines in
prices for industrial supplies and materials. Prices for
nonagricultural industrial supplies and materials also fell as
did prices for consumer goods excluding automobiles.