February was a month of declines in import prices with a 0.1% decline
In February, import prices fell by 0.1 percent, the seventh time in the past eight months that the price of imported goods fell, contributing to a slowdown in U.S. inflation, as well as a drop in government spending.
Wall Street Journal polled economists who estimated the economy would decline by 0.2% based on their estimates.
Compared to last summer, there has been a significant drop in the price of imports over the past year, largely due to the large fall in the price of oil.
As recently as one year ago, import prices were rising at a frothy 13% rate, indicating an increase in import prices of 16% year-over-year. This is the first time import prices have dropped year-over-year since the end of 2020.
Last month's headline number fell because of a 5% fall in the cost of imported fuel, which is a large factor helping to drive the decline.
In November 2022, for the first time in eight months, the cost of imports outside of fuel rose 0.4% to mark the third straight month of increases. However, from May to November 2022 these prices had fallen for eight straight months.
Imports of non-fuel products have increased by a mere 0.2% in the past year.
As we mentioned in a previous article, food, drinks, animal feed, consumer goods, new automobiles, and imported industrial supplies are all rising in price.
There was an increase of 0.2% in export prices in February compared to January.
In addition to declining prices for exports over the past 12 months, export prices have increased by about 17% over the same period last year as a global spike in inflation swept the globe at a frenzied pace.
As oil prices have fallen in recent months, U.S. inflation has slowed, but many other imported goods costs have flattened out as shortages of supplies have decreased gradually and as the global economy has weakened, inflation has steadied.
The Federal Reserve's rise in interest rates will further curb Americans' appetite for imports, but import-related inflation only contributes to the stubbornly high price pressures in the United States.
Trades on Thursday rose for the Dow Jones Industrial Average DJIA and the S&P 500 SPX.
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