Labor Department: Import Prices Continue On 10-Month Slide

The Labor Department reported Wednesday that U.S. import prices declined for the 10th straight month in April, with nonfuel prices in April more than offsetting higher fuel prices.

Economists say the latest gauge on import prices could be reflecting the impact of a relatively strong dollar, the latest sign pointing to inflation pressures that could sway the Federal Reserve to delay raising interest rates past mid-June.

The Labor Department said on Wednesday import prices fell 0.3 percent last month after falling by 0.2 percent in March and 0.4 percent in February.

Economists polled by Reuters had forecast import prices to gain 0.3 percent, but in the 12 months through April, import prices have tumbled 10.7 percent.

The dollar has seen a gain of about 11 percent against the currencies of America’s main trading partners since June, particularly Canada, Europe and China. That has left inflation running well below the Fed’s 2 percent target.

With alleged low inflation, the U.S. central bank will keep interest rates down, as they have since Dec. 2008, longer than previously anticipated. It was a general consensus that the Fed would raise rates in mid-2015, but U.S. economic growth fizzled in the first quarter. The government’s estimates on the trade deficit had pegged GDP at around 0.2 percent, but they were wrong. The U.S. trade deficit ballooned in March, indicating the economy contracted.

Meanwhile, the price index for import fuel gained 0.7 percent in April after rising 1.2 percent the previous month, which was the first monthly increase in fuel prices since the index rose 1.6 percent in June 2014. Imported petroleum prices, specifically, rose 1.0 percent after increasing 1.6 percent in March, while import prices excluding petroleum dropped 0.4 percent in April after a similar decline in March.

Imported food prices, including foods, feeds, and beverages fell 0.9 percent in April, after declining 0.7 percent in March.

The report also showed export prices declined 0.7 percent last month after gaining a paltry 0.1 percent in March. Export prices fell 6.3 percent in the 12 months through April.