U.S import prices rose did not rise as much as it was expected to in June, as rising costs for petroleum products were offset by declining consumer and capital goods prices, suggesting an inflation that could continue to remain inactive for a while. On Wednesday, the marginal increase reported by the Labor Department reflected the lingering effects of the dollar’s surge, despite its weakening against the currencies of the United States’ main trading partners over the past year.
Import prices increased by 0.2 percent last month after jumping 1.4 percent in May. Import prices, excluding petroleum, dropped 0.3 percent after gaining 0.4 percent the prior month. Economists had forecasted a rise in import prices of 0.5 percent in June. In the 12 months through June, import prices fell 4.8 percent, the smallest drop since November 2014. The dollar surged 20 percent on a trade-weighted basis, putting downward pressure on import prices and keeping inflation suitably below the Federal Reserve’s target of two percent. Though the dollar has experienced a weakening this year, it has recovered its bulk of losses in the midst of last month’s stunning vote in Britain’s Brexit vote to leave the European Union.
Last month, imported petroleum prices rose 6.4 percent, while food prices stumbled by 1.3 percent. While prices for imported capital goods fell 0.3 percent and consumer goods, excluding automobiles, fell similarly by 0.2 percent. Imported industrial supplies and materials prices, excluding fuels, fell 0.3 percent. The report also showed export prices increased 0.8 percent in June, after rising 1.2 percent in May. Export prices went down 3.5 percent from a year ago. Prices for agricultural exports increased 2.4 percent, boosted by higher soybean and corn prices. Prices for nonagricultural exports rose 0.5 percent last month. The increase was primarily led by gains in prices for industrial supplies and material, as well as capital goods. But still, prices for consumer goods exports fell.