U.S. Markets

U.S. import prices fall on lower oil costs, strong dollar

Cargo containers at the Port of Los Angeles California, February 18, 2015. REUTERS/Bob Riha, Jr.

WASHINGTON, (Reuters) - U.S. import prices in July posted their biggest decline in six months as the cost of petroleum products and other goods fell, suggesting inflation could remain tame for a while.

The Labor Department said on Thursday import prices dropped 0.9 percent last month, the largest fall since January, after being unchanged in June. Import prices have now declined in 11 of the last 13 months.

Economists had forecast import prices falling 1.1 percent after a previously reported 0.1 percent dip in June.

In the 12 months through July, prices dropped 10.4 percent. Last month, imported petroleum prices fell 5.9 percent after rising 1.6 percent in June.

Import prices excluding petroleum fell 0.3 percent, also reflecting the impact of a strong dollar. The dollar has gained 15.7 percent against the currencies of the United States’ main trading partners since June 2014, mainly on expectations the

Federal Reserve will raise interest rates this year.

In July, imported food prices were unchanged after dropping 0.7 percent in June. Prices for imported capital goods fell 0.2 percent, and were unchanged for automobiles.

The report also showed export prices slipped 0.2 percent last month after falling 0.3 percent in June. Export prices dropped 6.1 percent in the 12 months through July.

Reporting by Lucia Mutikani; Editing by Paul Simao