Prices declined for imports and exports in December, a sign of the chill in the global economy that is hurting exporters but giving respite to U.S. drivers stung by high fuel prices.

Overall import prices fell 0.1 percent, in line with the expectations of economists polled by Reuters, Labor Department data showed on Friday.

Prices fell 0.1 percent for both fuel and non-fuel imports.

That points to a tame inflation environment that should allow the Federal Reserve to stay on its ultra-easy monetary policy course as it tries to nurse the economy back to health.

At the same time, export prices fell, dragged down by a 0.2 percent drop in prices for non-agricultural exports. Prices fell for exported capital goods and consumers goods.

U.S. manufacturers selling their goods abroad appear to have declining power in pricing as the global economy takes a hit from the European debt crisis.