U.S. import prices dropped for the seventh consecutive month in January, according to government data released on Friday. The decline was driven by lower energy costs, resulting in the smallest annual increase in imported inflation since late 2020.
The Labor Department reported that U.S import prices fell 0.3% last month after a revised 0.5% decrease in December and an unexpected 1% drop in November as well as a 2% plunge from October through August due to falling fuel costs amid weak global demand during the pandemic-induced recessionary period. Excluding fuels, imports rose 0.2%.
In terms of year-on-year changes, overall U . S . import prices were up just 1%, down from the 3 % growth rate registered at the end of 2020 and marking the lowest level since September 2019 when it was unchanged compared with the previous year’s figures. This is also significantly below the Federal Reserve’s target inflation rate of 2%.
Overall this news indicates that consumer spending will remain subdued despite fiscal stimulus packages passed recently by Congress which could lead to further economic slowdown if not addressed properly soon enough.
Read more at Reuters
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