Last month, the import prices fell as the cost of several goods most especially petroleum continued to decline. This activity suggests that cheaper crude oil as well as a strong dollar will continuously keep imported inflation pressures for sometime quite subdued.
The Labor Department on Thursday said that the import prices significantly dropped by about .4 percent last month after there was a revised decreased of .3 percent in the other month. The import prices have also declined in a total of 15 over the last 17 months. Economists had made a forecast that import prices will fall by about .7 percent after it made a report of a .5 percent drop in the month of October. In the 12 months going to November, the prices significantly tumbled by 9.4 percent. The dollar strengthened and there was a sharp decline in the prices of oil. These contributed to the dampening of the inflation and left it running below the 2 percent of the Federal Reserve. However, given the tightening conditions of the labor market, tame price pressures are not likely to prevent the Federal Reserve from its decision in raising the interest rates on the coming days. This happens for the first time in nearly ten years or a decade. The tightness in labor market is expected to be able to spur faster wage growth as well as gradually push inflation to reach its target.
Last November, the prices of imported petroleum fell by about 2.5 percent after it rose nearly .4 percent in the month of October. The further weakness is likely to follow a recent slump in the prices of oil to a seven year all time low. The import prices which do not include petroleum slipped by .3 percent after it fell by .4 percent in October. The dollar on the other hand gained 18 percent against the other currencies that traded in the United States. This makes the imports less expensive. Last month, the imported food prices also fell by .5 percent and the sector declined for three straight months. Even companies selling Paper Mart boxes and other packaging materials are affected by this sudden turn in the economy.