Import, Export Prices Fall in May

U.S. import prices recorded their largest decline in nearly two years in May as energy and food costs fell, government data showed on Tuesday, pointing to muted inflation pressures.

Overall import prices fell 1.0 percent, the biggest drop since June 2010, the Labor Department said. April's data was revised to show a flat reading instead of the previously reported 0.5 percent drop.

The decline last month was in line with economists' expectations. In the 12 months to May, import prices fell 0.3 percent, posting their first year-on-year decline since October 2009.

Stripping out fuels and food, import prices were unchanged, dampened by weak costs for imported industrial supplies and materials and autos. The price for imported capital goods was unchanged last month.

The data was the latest sign that broader inflation pressures remained benign - in line with the Federal Reserve's view and potentially evidence of weaker global demand.

The Labor Department report also showed export prices fell 0.4 percent last month, the first drop since December and a bigger decline than the 0.1 percent fall forecast by economists. Export prices increased 0.4 percent in April.