Import Prices Resume Downward Trend in March
WASHINGTON -- U.S. import prices fell in March as rising petroleum costs were offset by declining prices for other goods, a sign of muted inflation that supports the view the Federal Reserve will probably not raise interest rates in June.
The Labor Department said Friday import prices dropped 0.3 percent last month after a downwardly revised 0.2 percent gain in February.
Economists polled by Reuters had forecast import prices slipping 0.3 percent after a previously reported 0.4 percent increase in February, when prices advanced for the first time after declining for seven straight months.
In the 12 months through March, prices plunged 10.5 percent, the largest drop since September 2009.
Lower crude oil prices and a buoyant dollar have dampened price pressures, leaving inflation running well below the Fed's 2 percent target.
Officials at the central bank, some of whom have shown a willingness to consider a rate hike at the June policy-setting meeting, view the low inflation environment as transitory.
But the combination of low inflation and weak economic growth in the first quarter has prompted many economists to push back their rate hike expectations to later in the year.
And some economists believe monetary policy tightening will only begin in 2016. The Fed has kept its key short-term interest rate near zero since December 2008.
Last month, imported petroleum prices rose 0.8 percent after jumping 5.2 percent in February.
Import prices excluding petroleum fell 0.4 percent in March. They had dropped 0.3 percent in February. Imported food prices fell 1.1 percent after being unchanged in February.
The report also showed export prices edged up 0.1 percent last month after slipping 0.2 percent in February. Export prices declined 6.7 percent in the 12 months through March, the largest drop since July 2009.