<Import Prices Post Largest Fall on Record
Wednesday May 14, 9:04 am ET
WASHINGTON (Reuters) - U.S. import prices posted a record drop in April, dragged down by a sharp fall in petroleum costs, and by falling prices in a wide range of other categories, the government said on Wednesday in a report that may fan deflation fears.
Import prices sank 2.7 percent in April, the Labor Department said, far below analyst expectations for a drop of just 0.6 percent. The decline was the largest one month drop in the history of the report and followed an increase of 0.7 percent in March.
Petroleum prices plunged 16.2 percent, the biggest drop since February 1991. But excluding petroleum, import prices still fell 0.9 percent.
Prices of nonpetroleum imported industrial materials and supplies fell 5.0 percent, also the largest drop on record.
The cost of imported cars and parts were flat in April, while the price of imported consumer goods also showed no change.
Export prices were also down, declining 0.1 percent.
The Federal Reserve policy-makers meeting last week raised concerns about deflation.
However, with the Labor Department releasing reports on producer prices on Thursday, and consumer prices on Friday, both the Fed and financial markets are likely to want to wait to see those reports for a more complete picture of price pressures.
"I think the Fed will want to look at the PPI and CPI," said Carol Stone, deputy chief economist, Nomura Securities International Inc., New York.
"These import prices are not seasonally adjusted. They (the Fed) will wait for broader price information."
Analysts are expecting producer prices to drop 0.6 percent and the consumer price report is expected to show a fall of 0.1 percent.>
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