Import prices in the U.S. saw a modest decrease in the month of January, according to a report released by the Labor Department on Friday.
The Labor Department said import prices dipped by 0.2 percent in January after edging down by a revised 0.1 percent in December.
Economists had expected import prices to slip by 0.2 percent compared to the 0.4 percent increase originally reported for the previous month.
The modest decrease in import prices reflected an extended nosedive in prices for fuel imports, which plummeted by 4.9 percent in January after plunging by 4.4 percent in December.
On the other hand, the report said prices for non-fuel imports rose by 0.3 percent in January after climbing by 0.4 percent in December.
The Labor Department said higher prices for foods, feeds, and beverages, capital goods, automotive vehicles and consumer goods more than offset lower prices for non-fuel industrial supplies and materials.
With import prices declining for the seventh straight month, the annual rate of growth slowed to 0.8 percent in January from 3.0 percent in December.
The year-over-year growth was much slower than the 2.9 percent expected by economists and reflects the slowest annual growth since December 2020.
“Import prices provided some encouraging news on the inflation front after stronger than expected CPI and PPI reports earlier this week,” said Matthew Martin, US Economist at Oxford Economics.
He added, “The news, however encouraging, will likely factor little into the Fed’s decision to raise rates at the March meeting, and potentially the May meeting as well, as it continues to wrangle with stubborn inflation.”
Meanwhile, the report said export prices climbed by 0.8 percent in January after plunging by a revised 3.2 percent in December.
The increase surprised economists, who had expected export prices to edge down by 0.2 percent compared to the 2.6 percent slump originally reported for the previous month.
The unexpected rebound came as prices for non-agricultural exports increased by 0.8 percent, more than offset a 0.2 percent dip in prices for agricultural exports.
The annual rate of growth in export prices still slowed to 2.3 percent in January from 4.3 percent in December, reflecting the smallest year-over-year increase since December 2020.
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