US import prices post largest drop in seven months
WASHINGTON (Reuters) — U.S. import prices fell more than expected in October amid a broad decline in the costs of goods, the latest indication that inflation was retreating.
Import prices dropped 0.8% last month, the biggest drop since March, the Labor Department's Bureau of Labor Statistics said on Thursday. Data for September was revised higher to show prices increasing 0.4% instead of edging up 0.1% as previously reported. Economists polled by Reuters had forecast import prices, which exclude tariffs, falling 0.3%.
In the 12 months through October, import prices declined 2.0% after decreasing 1.5% in September. Annual import prices have now dropped for nine straight months. Data this week showed consumer prices were unchanged in October, while producer prices declined by the most in three-and-a-half years.
Subsiding inflation, together with easing labor market conditions and cooling consumer spending, have bolstered expectations that the Federal Reserve is done raising interest rates. Financial markets are anticipating a rate cut next May, according to CME Group's (NASDAQ:CME) FedWatch tool.
Since March 2022, the Fed has hiked its policy rate by 525 basis points to the current 5.25%-5.50% range.
Imported fuel prices dropped 6.3%, reversing September's gain. The cost of imported food fell 0.6% after dropping 0.4% in September. Excluding fuels and food, import prices dropped 0.2% after dipping 0.1% in September. These so-called core import prices decreased 1.3% year-on-year in September.
The dollar has strengthened against the currencies of the United States' main trading partners this year, helping to dampen imported inflation pressures.
Prices for imported capital goods dropped 0.2% after being unchanged in the
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