U.S. Import Prices Slump 1.2% In December Amid Sharply Lower Fuel Costs

While the Labor Department released a report on Thursday showing a significant drop in U.S. import prices in the month of December, the decrease was not quite as steep as economists had anticipated.

The Labor Department said import prices tumbled by 1.2 percent in December after falling by a revised 0.5 percent in November.

Economists had expected import prices to slump by 1.4 percent compared to the 0.4 percent drop originally reported for the previous month.

The decrease in import prices was primarily due to another sharp drop in prices for fuel imports, which plummeted by 9.5 percent in December after plunging by 3.5 percent in November.

A 10.0 percent drop in petroleum prices led the decrease in fuel prices, although natural gas prices also declined by 6.8 percent.

Excluding the decrease in fuel prices, prices for non-fuel imports fell by 0.3 percent in December after edging down by 0.2 percent in November.

The Labor Department said lower prices for non-fuel industrial supplies and materials, foods, feeds, and beverages, and each of the major finished goods categories all contributed to the drop in non-fuel prices.

The report also said export prices slid by 1.1 percent in December following a revised 0.7 percent decrease in November.

Export prices had been expected to dip by 0.5 percent compared to the 0.6 percent decrease originally reported for the previous month.

The Labor Department said decreases in both agricultural and non-agricultural prices contributed to the overall decline in export prices.

Prices for agricultural exports fell by 1.0 percent in December following a 0.9 percent decrease in November, with the continued decline partly reflecting a 4.0 percent drop in nut prices.

The report said prices for non-agricultural exports also slid by 1.0 percent in December after falling by 0.7 percent in November.

Lower prices for non-agricultural industrial supplies and materials, capital goods, and consumer goods all contributed to the drop in non-agricultural prices.

Compared to the same month a year ago, import prices were down by 8.2 percent in December, and export prices were down by 6.5 percent.