Import prices in the U.S. fell by much more than anticipated in the month of November, according to a report released by the Labor Department on Wednesday, with the decrease largely due to a drop by fuel import prices.
The report said import prices fell by 0.9 percent in November after edging up by a revised 0.3 percent in October. With the decrease, import prices fell for the first time since July.
Economists had expected prices to decrease by about 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.
The steeper than expected drop by import prices came as prices for fuel imports tumbled by 3.0 percent in November after dipping by 0.1 percent in October.
The Labor Department said a 3.6 percent decline in petroleum prices in November more than offset an 18.2 percent increase in natural gas prices.
Excluding the steep drop in fuel prices, import prices slipped by a more modest 0.2 percent in November following a 0.4 percent increase in October.
The modest monthly drop by non-fuel imports prices reflected decreases by most of the major finished goods categories.
Additionally, the Labor Department said export prices dropped by 0.7 percent in November after coming in unchanged in October. The drop came as a surprise to economists, who had expected export prices to rise by 0.3 percent.
While agricultural export prices inched up by 0.1 percent in November after falling by 1.9 percent in October, non-agricultural export prices fell by 0.7 percent after rising by 0.2 percent in the previous month.
Compared to the same month a year ago, import prices were down by 1.6 percent in November, while export prices were up by 0.7 percent.
Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, ahead of PPI tomorrow and CPI Friday, import prices are benign as the rest of the world tries to ship to us what they can at a competitive cost in the context of a slow global economy."
Thursday morning, the Labor Department is scheduled to release a separate report on producer prices in the month of November.
Economists expect producer prices to fall by 0.5 percent in November after dipping by 0.2 percent in October. Core prices, which exclude food and energy prices, are expected to rise by 0.2 percent after falling by 0.2 percent in the previous month.
by RTT Staff Writer
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