U.S. Import Prices Fall 0.6% In March, Plunge 4.6% Year-Over-Year

(RTTNews) - The Labor Department released a report on Friday showing U.S. import prices fell by much more than expected in the month of March.

The report said import prices slid by 0.6 percent in March after slipping by a revised 0.2 percent in February.

Economists had expected import prices to edge down by 0.1 percent, matching the 0.1 percent dip originally reported for the previous month.

The bigger than expected decrease in import prices partly reflected a continued slump in prices for fuel imports, which tumbled by 2.9 percent in March after plunging by 5.7 percent in February.

Excluding the steep drop in prices for fuel imports, however, import prices still declined by 0.5 percent in March after climbing by 0.4 percent in February.

Compared to the same month a year ago, import prices were down by 4.6 percent in March, reflecting the largest 12-month drop since May 2020.

"We still expect the Fed the raise rates in May, but the import price report marks another encouraging datapoint after this week's CPI and PPI reports," said Matthew Martin, U.S. Economist at Oxford Economics. "Lower import prices will support weaker goods inflation in the months ahead."

He added, "A potentially stronger dollar and cuts to production by OPEC+ could offset some of the weakness but will not halt the import price disinflationary cycle."

The Labor Department said export prices also fell by 0.3 percent in March following a revised 0.4 percent increase in February.

Economists had expected export prices to dip by 0.1 percent compared to the 0.2 percent uptick originally reported for the previous month.

Prices for agricultural exports slumped by 1.5 percent in March after jumping by 1.2 percent in February, while prices for non-agricultural exports edged down by 0.2 percent after rising by 0.3 percent.

Export prices were down by 4.8 percent compared to the same month a year ago, reflecting the largest 12-month decline since May 2020.