WASHINGTON (Reuters) - U.S. import prices fell for a second straight month in August, weighed down by declining costs for petroleum products and a strong dollar, which overtime could help to lower inflation.
Import prices dropped 1.0% last month after declining 1.5% in July, the Labor Department said on Thursday. In the 12 months through August, import prices increased 7.8% after climbing 8.7% in July. Economists polled by Reuters had forecast import prices, which exclude tariffs, falling 1.2% month-on-month.
Coming on the heels of data on Wednesday showing a second monthly drop in producer prices in August, weak import prices should further assuage fears of inflation becoming entrenched.
The government earlier this week reported an unexpected increase in consumer prices in August, which cemented expectations for a third 75 basis points interest rate hike from the Federal Reserve next Wednesday.
The drop in import prices also suggests an easing of bottlenecks in the global supply chain.
Imported fuel prices fell 6.8% last month after decreasing 7.5% in July. Petroleum prices declined 7.1%, while the cost of imported food dropped 1.6%.
Excluding fuel and food, import prices dipped 0.1%. These so-called core import prices fell 0.5% in July. They increased 3.8% on a year-on-year basis in August. Dollar strength is helping to limit the increase in core import prices.
The dollar has gained 7.5% against the currencies of the United States' main trade partners since January.
The report also showed export prices dropped 1.6% in August after decreasing 3.7% in July. Prices for agricultural exports fell 0.4% as lower prices for corn, fruit, meat and wheat offset higher prices for soybeans and vegetables. Nonagricultural export prices decreased 1.8%. Export prices increased 10.8% year-on-year in August after advancing 12.9% in July.