The FINANCIAL — Prices for imported goods fell in June, a reminder of the strong dollar and soft overseas growth that are constraining the U.S. economy, according to Nasdaq.
Import prices decreased a seasonally adjusted 0.1% in June from a month earlier, the Labor Department said on July 14. Economists surveyed by The Wall Street Journal had expected import prices to rise 0.1% in June from May.
Over the past year, import prices are down 10%.
Falling oil prices started dragging import prices down in mid-2014. While fuel prices have since partially rebounded, a stronger dollar and weak overseas demand are now pushing inflation lower.
A stronger dollar effectively makes American exports more expensive while making imports cheaper.
Last month’s shift in import prices reflected a 0.2% drop in nonfuel prices. Over the past year, nonfuel import prices are down 2.3%, the largest decline since October 2009.
The price of fuel imports rose 0.7% and petroleum climbed 0.8%.
In other categories, prices for food and autos fell. While the index for capital goods—machinery, heavy trucks and the like—was flat for the month, it is down 1.7% over the past year, the sharpest decline in more than a decade.
The price of U.S. exports fell 0.2% in June.
Other measures suggest inflation in the U.S. remains historically weak.
The Commerce Department’s personal consumption expenditures index—the Federal Reserve’s preferred measure of inflation—has undershot the central bank’s inflation goal of 2% for three years. Overall prices were up just 0.2% in May from a year earlier.
The Fed is counting on inflation to gradually rise toward 2%, though official forecasts don’t show it hitting that target before 2017. That has been one reason officials have been hesitant to raise interest rates from near zero, where they have held since December 2008.
“We will be watching carefully to see if there is continued improvement in labor market conditions, and we will need to be reasonably confident that inflation will move back to 2% in the next few years,” Fed Chairwoman Janet Yellen said last week in a speech.