The numbers: The cost of imported goods fell in May for the fourth time in the past five months and continued to put downward pressure on U.S. inflation.
Economists polled by the Wall Street Journal had estimated a 0.5% decrease.
Over the past year, the cost of imports has dropped almost 6%, marking the biggest decline since the pandemic in 2020.
Falling oil prices have played a big role, but the cost of most imported goods is also in retreat.
What’s more, other snapshots of U.S. inflation such as consumer and wholesale prices showed price pressures are slowly easing.
Key details: The cost of foreign-produced fuel dropped 6.4% last month and largely explained the large decline in import prices.
Still, the price of imports excluding fuel also fell 0.1%. The cost of imported foods and drinks and industrial supplies declined last month, offsetting increases in auto prices.
Nonfuel import prices have fallen 1.6% in the past 12 months.
Export prices sank 1.9% in May. They are down 10% over the past year.
Big picture:Import prices only play a small role in U.S. inflation, but every bit of improvement helps.
While inflation is clearly on a downtrend, the Federal Reserve said it might take a couple of years for the U.S. to return to prepandemic levels of 2% inflation or less.
Inflation is running at a 4% to 5% rate based on the main U.S. price indexes.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open lower in Thursday trades.
This post was originally published on Market Watch
