US import prices fell in February for an eighth straight month, weighed down by declining costs for petroleum and a range of other goods, but the pace of decline is slowing as the dollar's rally fades and oil prices stabilize.
The Labor Department said on Friday import prices slipped 0.3% last month after a revised 1% decrease in January. Import prices have decreased in 18 of the last 20 months, reflecting a robust dollar and plunging oil prices, Reuters reported.
They were down 6.1% in the 12 months through February. That was the smallest year-on-year drop since December 2014. Economists had forecast import prices slipping 0.6% last month after a previously reported 1.1% fall in January.
US financial markets were little moved by the data. The import deflation is likely close to an end as the dollar's appreciation loses some steam after gaining roughly 20% against the currencies of the United States' main trading partners between June 2014 and December 2015.
So far this year, the dollar has strengthened about 0.9% on a trade-weighted basis. At the same time, oil prices have also shown tentative signs of stabilizing. Should these trends continue, import prices could start to rise soon and help prop up domestic inflation.
Reports last month showed a broad pick-up in prices in January, raising optimism inflation will rising toward the Federal Reserve's 2% target and allow the US central bank to continue to gradually raise interest rates this year. The Fed increased its key overnight interest rate in December for the first time in nearly a decade. Last month, imported petroleum prices fell 4.0% after plummeting 14.3% in January. Import prices excluding petroleum dipped 0.1% after being unchanged in January.
