U.S. Import Prices Slump Amid Steep Drop In Fuel Prices

Partly reflecting a steep drop in fuel prices, the Labor Department released a report on Tuesday showing U.S. import prices fell by more than expected in the month of June.

The Labor Department said import prices tumbled by 0.9 percent in June, while revised data showed prices were unchanged in May.

Import prices had been expected to drop by 0.7 percent compared to the 0.3 percent decrease originally reported for the previous month.

The bigger than expected decrease in import prices in June was partly due to a 6.5 percent nosedive in prices for fuel imports, which jumped by 2.3 percent in May.

Excluding fuel imports, import prices fell by 0.3 percent for the second consecutive month amid lower prices for foods, feeds, and beverages, non-fuel industrial supplies and materials, capital goods and consumer goods

The report also showed a continued decrease in export prices, which slumped by 0.7 percent in June after dipping by 0.2 percent in May. Economists had expected another 0.2 percent drop.

The continued decline in export prices came as prices for non-agricultural exports plunged by 1.1 percent, as lower prices for non-agricultural industrial supplies and materials more than offset higher prices for capital goods and consumer goods.

On the other hand, prices for agricultural exports spiked by 2.7 percent, led by skyrocketing prices for corn and soybeans.

The Labor Department said import prices in June were down by 2.0 percent compared to the same month a year ago, reflecting the largest annual drop since August of 2016.

Export prices also showed their largest annual drop since August of 2016, tumbling by 1.6 percent year-over-year in June.