US imports take biggest slide since 2008
U.S.聽import聽prices聽recorded their biggest drop in six years in January as the cost of petroleum and a range of other goods fell, a sign that domestic inflation pressures could remain muted for a while.
The Labor Department said on Friday聽import聽prices聽tumbled 2.8 percent last month, the largest decline since December 2008, after sliding by a revised 1.9 percent in December. It was the seventh straight month of declines in聽import聽prices.
Economists polled by Reuters had forecast聽import聽prices聽falling 3.2 percent last month after a previously reported 2.5 percent drop in December.
"Prices for industrial supplies were hit the hardest, plunging 9.1 percent in January," Barclays Research economist Jesse Hurwitz wrote in an e-mailed analysis. "In our view, the strength in the US dollar and lower energy prices are key factors driving the biggest monthly decline in imported nonpetroleum goods prices since 2009. The recent stabilization in oil prices should help slow the decline in prices of energy imports in coming months; however, the outlook for further monetary policy divergence and appreciation of the dollar will likely continue to put downward pressure on nonpetroleum goods prices." 聽
In the 12 months through January聽prices聽declined 8.0 percent, the largest year-on-year drop since September 2009.
Crude oil聽prices聽have plunged nearly 60 percent since June as increased shale production in the United State and weak global demand caused a glut on the market.
At the same time, the dollar has strengthened significantly against the currencies of the country's main trading partners, helping to pull inflation further away from the Federal Reserve's 2 percent target.
Despite low inflation,聽the U.S. central bank聽is widely expected to start raising interest rates in June, given a rapidly tightening labor market. The Fed has kept its short-term interest rate near zero since late 2008.
Data next week is expected to show producer聽prices聽fell for a third straight month in January.
Last month, imported petroleum聽prices聽plunged 17.7 percent, the biggest fall since December 2008, after dropping 12.4 percent in December. Imported food聽prices聽fell 2.2 percent in January, the largest fall since February 2012.
There were also declines in the聽prices聽of imported capital goods, automobiles and consumer goods excluding autos.
Import聽prices聽excluding petroleum fell 0.7 percent last month, the biggest drop since March 2009, after being flat in December.
The Labor Department report also showed export聽prices聽fell 2.0 percent in January, the largest decline since October 2011, after slipping 1.0 percent in December. A strong dollar is undercutting the competitiveness of U.S. exports.
Export聽prices聽fell almost across the board, with聽prices聽for non-agricultural goods and for industrial supplies and materials recording their biggest declines since 2008.
Export聽prices聽for consumer goods excluding autos saw their largest drop since 2009.
In the 12 months through January, export聽prices聽fell 5.4 percent, the biggest year-on-year decline since September 2009.
