Prices for imported goods declined in December, highlighting how lower oil prices and a strong dollar are putting downward pressure on inflation.
Import prices fell 1.2% from the prior month, the Labor Department said Thursday. It was the sixth straight monthly decline. Economists surveyed by The Wall Street Journal had expected a 1.4% decline.
Import prices fell 0.5% in November, revised from a 0.4% decline.
From a year earlier, import prices were down 8.2% in December. The year-over-year figure has declined for 17 consecutive months.
Swiftly falling oil prices are the primary culprit for declining import costs. Imported petroleum prices fell 10% in December–the largest monthly decline since August. Imported oil prices are down 41.3% from a year earlier. The rout on oil prices is not abating. Oil prices touched below $30 a barrel this week for the first time since 2003.
Outside of petroleum, import prices were down 0.4% in December, and have fallen 3.7% from a year earlier. That was the largest 12-month decline for the category since October 2009.
A stronger dollar has been exerting downward pressure on the price of imported goods in recent months. As the dollar gains strength against the euro and other currencies, it makes foreign products relatively cheaper for U.S. consumers.
In December, import prices fell in most categories, including a 1.4% drop in industrial materials excluding petroleum, a 0.3% fall in capital goods such as machinery, and a 0.1% decline in car and automotive part prices. The cost of nonagricultural foods, such as fish and distilled beverages, increased 0.5% last month, but overall food prices still fell.
U.S. export prices also declined last month, possibly reflecting lackluster demand overseas. Export costs fell 1.1% in December from the prior month. Export prices are down 6.5% year-over-year.
Unlike many other price gauges measured by the government, import and export prices are not seasonally adjusted.