Prices for imported goods fell sharply in January, the latest sign that a slumping global economy and plunging oil prices are weighing on inflation in the U.S.
Import prices fell 1.1% in January from December, matching the prior month's decline, the Labor Department said Friday. Prices have fallen for seven consecutive months and were down 6.2% in January from a year earlier.
Economists surveyed by The Wall Street Journal expected import prices to fall 1.5% in January from December.
The index declined in January largely due to a sharp drop in oil prices, which have suffered under weak demand globally and a buildup in supplies. The price of imported petroleum fell 13.4% from December, the biggest drop since August, and 35.3% from a year earlier.
Outside of petroleum, prices for all other imports fell 0.2% over the month and 3.1% over the year.
Prices for imported autos, food and consumer goods all picked up in January from December, while prices for so-called capital goods such as machinery continued to fall.
The index is one of several measures the Federal Reserve is closely watching as it gauges the heath of the U.S. economy and whether it is able to withstand further increases in short-term interest rates. Falling price growth typically signals weak demand for products, whether they be toothbrushes or cars, as well as a strong dollar - a situation that could lead the Fed to hold off on raising rates.
Friday's report also showed U.S. exports continue to suffer amid the global economic slowdown. Export prices fell 0.8% in January after dropping 1.1% in December. They're down 5.7% over the past year.
Unlike many other price gauges measured by the government, import and export prices are not seasonally adjusted.
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