US import prices post biggest decline in over five years
WASHINGTON: United States’ import prices dropped by the most in more than five years in March amid declines in the costs of petroleum products and a range of other goods, pointing to import deflation that could deepen amid the coronavirus pandemic.
The report from the Labor Department on Tuesday followed data last week showing the biggest decline in the consumer price index in more than five years as state and local governments adopted stiff measures to control the spread of COVID-19, the respiratory illness caused by the coronavirus, virtually grounding the country and sending the economy into a tailspin and millions out of work. Producer prices also fell in March.
“Import prices remain firmly in deflation,” said James Watson, a senior US economist at Oxford Economics in New York.
“A strong dollar, low oil prices and a global recession will keep them that way.”
Import prices dropped 2.3 per cent last month, the largest decline since January 2015, after a downwardly revised 0.7 per cent drop in February. Import prices, which exclude tariffs, were previously reported to have decreased 0.5 per cent in February.
Economists polled by Reuters had seen import prices tumbling 3.2 per cent in March. In the 12 months through March, import prices plunged 4.1 per cent. That was the biggest drop since June 2016 and followed a 1.3 per cent decline in February.
Imported price data is collected on the first day of the month.
The Labour Department said while not directly related to the coronavirus pandemic, response rates for March were approximately 6.5 percentage points lower than March 2019.