US import prices fall on oil slide, strong dollar

Tim Rue | Bloomberg | Getty Images

U.S. import prices fell in January for a seventh straight month as the cost of petroleum products continued to decline and a strong dollar undercut prices for a range of goods, pointing to weak inflation in the near term.

The Labor Department said on Friday import prices dropped 1.1 percent last month after a revised 1.1 percent decrease in December. Import prices have decreased in 17 of the last 19 months, reflecting a robust dollar and plunging oil prices.

Economists had forecast import prices tumbling 1.4 percent after a previously reported 1.2 percent fall in December.

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Import prices fell 6.2 percent compared to January 2015. The dollar has gained 21 percent against the currencies of the United States' main trading partners since June 2014. U.S. oil prices were near 12-year lows this week.

The oil price weakness is contributing to keeping inflation below the Federal Reserve's 2 percent target.

Weak inflation and a sell-off of global equities have tightened financial market conditions. The darkening global economic outlook could make it harder for the U.S. central bank to raise interest rates this year.

The Fed increased its key short-term interest rate in December, the first hike in nearly a decade.

Imported petroleum prices dropped 13.4 percent in January after tumbling 9.2 percent in December. Import prices excluding petroleum slipped 0.2 percent after falling 0.4 percent in the prior month.

Imported food prices rose 0.6 percent last month, while prices for industrial supplies and materials excluding petroleum fell 1.4 percent.

Prices for imported capital goods fell 0.2 percent and the cost of imported automobiles rose 0.2 percent.

The report also showed export prices dropped 0.8 percent in January after sliding 1.1 percent in December. Export prices were down 5.7 percent from a year ago.

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