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Import prices fall again

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Import prices fall again

1.1% decline less than expected.

Import prices fell again in January, driven largely by a plunge in oil prices, according to a report issued today by the Labor Department.

Prices fell 1.1% during the month, below analysts’ expectations of a 1.5% decrease. This matches an identical drop in December, and represents the 7th month in a row import prices have fallen.

In the twelve months ending in January, import prices have fallen 6.2% - again, largely due to falling oil prices and the strength of US dollar. 

Most observers believe the continued decline in import prices reflects, at least in part, a general weakness in demand that may give Fed Chair Janet Yellen pause when considering any additional interest rate hikes in the near term, particularly given increased signs of weakness in the global economy, uneven growth in the US and stubbornly meager wage growth in the US.

Export prices also declined, slipping 0.8% during the month, following a 1.1% decline in December.  Export prices have fallen 5.7% over the last twelve months.

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