U.S. Import Prices Fell in May

By Sarah Chaney and Ben LeubsdorfFeaturesDow Jones Newswires

Overall prices for foreign goods shipped to the U.S. dropped more than expected in May, another sign of faltering inflation.

Import prices decreased 0.3% in May from a month earlier, the steepest decline since the index dropped 0.5% in February 2016, the Labor Department said Thursday. Economists surveyed by The Wall Street Journal expected a 0.1% decrease last month. Unlike many economic indicators, import prices are not adjusted to smooth out seasonal variations.

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Over the past year, overall import prices rose 2.1%, the seventh consecutive month of year-over-year price growth.

May's fall in import prices reflected a decline in the price of imported petroleum, which fell 3.9% from April. Outside of petroleum, import prices were unchanged last month.

The import-price index is one of several gauges the Federal Reserve studies to understand how quickly prices are rising in the U.S. The Fed's preferred inflation gauge, the Commerce Department's personal-consumption-expenditures index, advanced 1.7% in April from a year earlier, down from 1.9% in March. Despite some concerns about recent soft inflation data, the Fed decided to lift its benchmark short-term interest rate at its meeting on Wednesday.

Thursday's report also showed prices for U.S. exports decreased an average of 0.7% in May from a month earlier. From a year earlier, export prices were up 1.4%.

The Labor Department report on import and export prices can be accessed at: http://www.bls.gov/news.release/ximpim.toc.htm.

Write to Sarah Chaney at sarah.chaney@wsj.com and Ben Leubsdorf at ben.leubsdorf@wsj.com

(END) Dow Jones Newswires

June 15, 2017 08:45 ET (12:45 GMT)