U.S. import prices fell in November as the cost of petroleum and several goods continued to decline, suggesting that cheaper crude oil and a strong dollar will keep imported inflation pressures subdued for a while.
The Labor Department said on Thursday import prices dropped 0.4 percent last month after a revised 0.3 percent decrease in October. Import prices have declined in 15 of the last 17 months. Economists had forecast import prices falling 0.7 percent after a previously reported 0.5 percent drop in October.
In the 12 months through November, prices tumbled 9.4 percent. Dollar strength and a sharp decline in oil prices have dampened inflation, leaving it running well below the Federal Reserve’s 2 percent target.
But given tightening labor market conditions, tame price pressures are unlikely to prevent the Fed from raising interest rates next week for the first time in nearly a decade. Labor market tightness is expected to spur faster wage growth and gradually push inflation toward its target.
Last month, imported petroleum prices fell 2.5 percent after rising 0.4 percent in October. Further weakness is likely following a recent slump in oil prices to seven-year lows.