WASHINGTON – US import prices fell by the most in six months in February as the cost of petroleum products dropped, and economists said they could decline further because of the coronavirus pandemic and an oil price war between Saudi Arabia and Russia.
The Labor Department said import prices slipped 0.5 percent last month after an upwardly revised 0.1 percent gain in January. Import prices, which exclude tariffs, were previously reported to have been unchanged in January.
Economists polled by Reuters had forecast import prices would decrease 0.8 percent in February. In the 12 months through February, import prices declined 1.2 percent after rising 0.3 percent in January.
The import price deflation and the coronavirus are expected to subdue inflation in the months ahead. The virus has disrupted supply chains as China, the main source of inputs used in many factories in the United States, struggles to bring manufacturing production back to full capacity.
While the resulting shortages are likely to push up prices of some goods, travel restrictions and social distancing are seen depressing demand for services such as travel, hotels, entertainment and eating out at restaurants. The coronavirus’s impact is expected to start showing up in March economic data.
In February, prices for imported fuels and lubricants tumbled 7.7 percent after falling 0.6 percent in January. Petroleum prices dropped 7.6 percent after being unchanged in January.
Imported food prices surged 1.5 percent last month. That followed a 0.4 percent increase in January. Excluding fuels and food, import rose 0.2 percent last month. The so-called core import prices edged up 0.1 percent in January. Core import prices fell 0.8 percent in the 12 months through February.
The cost of goods imported from China declined 0.2 percent in February, the most since January 2019, after being unchanged in the prior month. Prices fell 1.5 percent year-on-year in February.
The report also showed export prices dropped 1.1 percent in February, the largest decline since December 2015, after increasing 0.6 percent in January. Export prices decreased 1.3 percent on a year-on-year basis in February after rising 0.4 percent in January. — Reuters
