U.S. import prices continue to fall

Import prices in the U.S. fell in November, recording the fifth month of decline. Stronger dollar positions coupled with a lower cost for petroleum products were the key drivers of a contraction. These factors support the market's view that the rate of inflation may slow in the coming months. 

Christopher Rupkey, a leading economist at FWDBONDS, said that the Fed Chair has taken decisive steps to combat inflation in the country. Powell’s actions can be called successful, as a sharp rise in U.S. interest rates led to a significant rise in the U.S. currency, along with a drop in the cost of imported goods.

Last month, import prices fell by 0.6%. This figure is higher than the one in October when the cost of imported products dropped by 0.4%. However, falling prices in November marked the fifth month of declining indicators, the longest period since 2015. 

Economists polled by Reuters suggest a further 0.5% decline in import prices.

The cost of imported goods rose 2.7% year-over-year, the lowest gain since January 2021. 

U.S. consumer prices are likely to keep falling in 2023, thereby easing inflationary pressures, particularly on lower-income households. This is reported by Jeffrey Roach, a chief economist at LPL Financial.