Strong Dollar, Weak Oil Lead Import Prices Lower

Politics Reuters

U.S. import prices fell in September by the most in more than two years as the cost of petroleum products declined and a strong dollar made it cheaper for Americans to buy goods from abroad.

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The Labor Department said on Friday import prices fell 1.3 percent last month.

That was the biggest decline since June 2012 but just shy of expectations for a 1.5 percent drop. Export prices fell 1 percent during the month.

The drop in overall import prices was led by lower costs for imported fuels, with the cost of petroleum down 6.9 percent.

While the U.S. economy has accelerated in recent months, the global economy has appeared to slow, including in China, and the price of oil has weakened significantly.

But the data also showed many non-fuel prices also declined, signs that a stronger dollar was making it cheaper for Americans to buy imports.

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The dollar gained nearly 9 percent against the currencies of U.S. trading partners in the four months through October, boosted by expectations a stronger U.S. economy will lead the Federal Reserve to raise interest rates.

In October, prices for imports from the European Union fell 0.2 percent, while prices for Canadian goods and services dropped 2.3 percent. Prices from Mexico dropped 0.9 percent. Prices ticked higher by 0.1 percent for goods and services from China and Japan.

(Reporting by Jason Lange; Editing by Andrea Ricci)