U.S. import prices in August recorded their biggest drop in seven months as the cost of petroleum and a range of goods fell, indicating that a strong dollar and soft global demand continued to put downward pressure on imported inflation.
The Labor Department said on Thursday import prices fell 1.8 percent last month, the largest decline since January, after an unrevised 0.9 percent drop in July. Import prices have now declined in 12 of the last 14 months.
Economists had forecast import prices falling 1.6 percent.
In the 12 months through August, prices declined 11.4 percent, the largest drop since September 2009.
Very low inflation, in the face of a tightening labor market and strengthening economic growth, poses a challenge for Federal Reserve officials as they contemplate raising interest rates for the first time in nearly a decade.