WASHINGTON ―Import prices fell in June for the first time in a year as petroleum and food costs tumbled, according to a government report on Wednesday that suggested the commodity-driven spike in inflation was abating.
Overall import prices dropped 0.5 percent, breaking eight straight months of increases, the Labor Department said, after gaining 0.1 percent in May.
Economists polled by Reuters had expected prices to drop 0.6 percent last month. Import prices were up 13.6 percent in the 12 months through June.
Stripping out fuel and food, import prices were flat after rising 0.6 percent in May. The report supported the contention by Federal Reserve officials and independent economists that the commodity-induced jump in inflation would be temporary.
Data on Thursday is expected to show that wholesale prices fell 0.2 percent in June from May, according to a Reuters survey. The producer price index rose 0.2 percent in May.
High inflation undercut economic activity in first quarter, with growth slowing sharply to a 1.9 percent annual rate after a brisk 3.1 percent expansion in the final three months of 2010.
So far, data suggest that still-high commodity prices and disruptions to motor vehicle production because of a shortage of parts from Japan contributed to keeping growth sluggish during the April-June quarter.
Last month, a 1.6 percent drop in imported petroleum prices helped to push import prices down. The drop in petroleum in June was the biggest in a year and followed a 0.9 percent fall in May.
Imported food prices declined 1.9 percent, the largest fall in more than two years, after sliding 0.7 percent in May.
The price of imported motor vehicles and parts rose 0.3 percent last month after increasing 0.5 percent in May. The rise in motor vehicle prices reflects the lingering effects of supply chain disruptions after the March earthquake in Japan.
The Labor Department report also showed export prices edged up 0.1 percent in June after rising 0.2 percent the prior month. Analysts had expected export prices to gain 0.2 percent.