U.S. implication prices fell by the most in five months in May amid a broad decline in the cost of goods, the latest indication of voiceless inflation that strengthens the case for the Federal Reserve to cut interest rates this year.
The Labor Department about on Thursday import prices dropped 0.3% last month, the biggest decline since last December. Figures for April was revised down to show import prices rising 0.1% instead of climbing 0.2% as previously detailed.
Economists polled by Reuters had forecast import prices slipping 0.2% in May. In the 12 months through May, import payments fell 1.5% after decreasing 0.3% in April.
The report came on the heels of data on Wednesday showing consumer quotations remained tame in May, supporting financial market expectations that the Fed would cut rates this year.
The calls for an easing of fiscal policy are being driven by a slowing economy against the backdrop of worsening trade tensions between the United Conditions and China. President Donald Trump in early May imposed additional tariffs of up to 25% on $200 billion of Chinese goods, prompting retaliation by Beijing.
A container scram arrives at Yusen Terminals on Terminal Island at the Port of Los Angeles, January 30, 2019.
Mike Blake | Reuters
Trump on Monday put in jeopardied further duties on Chinese imports if no deal was reached when he meets Chinese President Xi Jinping at a G20 summit later this month in Japan.
Signify prices exclude duties. In May, prices for imported fuels and lubricants declined 1.0% after rising 1.7% percent in the earlier month. Imported food prices dropped 0.8% last month after surging 2.7% in April.
Excluding fuels and provisions, import prices slipped 0.2% in May after falling 0.3% in the prior month. So-called core import rewards decreased 1.5% in the 12 months through May. Though the dollar has weakened a bit this year, its gains last year against the currencies of the Collective States’ main trading partners continue to depress core import prices.
The cost of imported capital wares declined 0.1% last month. Prices for imported consumer goods excluding automobiles was unchanged. The cost of goods weighted from China edged down 0.1% last month after falling 0.2% in April. Prices knock 1.4% in the 12 months through May, the largest drop since February 2017.
The report also showed export premiums fell 0.2% in May after nudging up 0.1% in April. Export prices fell 0.7% on a year-on-year basis in May after close in oning 0.2% in April. Soybean prices tumbled 20.6% year-on-year.