US import prices have dropped by 2.2 percent in the month of January, the largest drop since February 2012. The drop in import prices is likely to decrease domestic inflation, making the Feds unlikely to each its goal of a 2 percent increase in inflation. Import prices have fallen 8 percent in the past 12 months, which is the largest drop since September 2009.
Prices for imported foods have fallen 1.8 percent and other consumer and capital goods prices also fell. By far the largest decrease in import prices come from foreign crude oil imports, which have fallen 17.7 percent last month.
The decreased import prices correspond to decreases in export prices with a decline of 2 percent in exports the largest since 2011. The strength of the dollar has increased in comparison to the US’s main trading partners, making competition in foreign markets difficult.
Read More – US January Import Prices Post Largest Drop Since 2008 (Reuters, Lucia Mutikani)