WASHINGTON (dpa-AFX) - In the third inflation-related report of the week, the Labor Department revealed Thursday that U.S. import and export prices both dropped by more than expected in the month of May.
With the monthly decreases, import and export prices both showed their biggest annual declines in over two years.
The Labor Department said import prices fell by 0.3 percent in May following a revised 0.1 percent uptick in April.
Economists had expected imports prices to dip by 0.2 percent compared to the 0.2 percent increase originally reported for the previous month.
The decrease in import prices was partly due to a pullback in prices for fuel imports, which tumbled by 1.0 percent in May after jumping by 1.7 percent in April.
Excluding fuel, import prices still fell by 0.3 percent in May, reflecting lower prices for non-fuel industrial supplies and materials, foods, feeds, and beverages, capital goods, and automotive vehicles.
Additionally, the Labor Department said export prices edged down by 0.2 percent in May after inching up by a revised 0.1 percent in April.
Export prices had been expected to slip by 0.1 percent compared to the 0.2 percent growth originally reported for the previous month.
Prices for agricultural exports showed another notable decline, slumping by 1.0 percent in May after plunging by 1.5 percent in April. Lower prices for soybeans, wheat, and fruit more than offset higher prices for meat and vegetables.
The report said prices for non-agricultural exports also dipped by 0.2 percent in May after rising by 0.2 percent in April, with the pullback reflecting lower prices for non-agricultural industrial supplies and materials, consumer goods, non-agricultural foods, and automotive vehicles.
Import prices in May were down by 1.5 percent year-over-year, matching the drop seen in January, which represented the largest year-over-year decline since August of 2016.
The Labor Department said export prices were also down by 0.7 percent compared to the same month a year ago, reflecting the biggest drop since October of 2016.
Separate reports released earlier this week also showed slowdowns in the annual rates of producer and consumer price growth.
Recent tame readings on inflation have further fueled expectations the Federal Reserve will cut interest rates in the near future if the pace of U.S. economic growth slows as expected.
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