The numbers: The cost of imported goods fell in January for the third month in a row, reflecting a broad easing of inflation in the U.S. that’s helped persuade the Federal Reserve to stop raising interest rates.
The import price index fell 0.5% last month, following even larger declines of 1% in December and 1.7% in November.
Lower oil prices once again played a big role in the declining cost of imports, but the price of a variety of consumer and industrial goods also fell.
Excluding fuel, import prices slid 0.2%, the government said Friday.
Over the past 12 months import prices have shrunk 1.7%, the biggest decline in three years. By contrast, imported prices rose at a annual rate of 3.4% just one year earlier in January 2018.
If fuel is omitted, import prices have slipped 0.2% in the past year.
What happened: The cost of imported fuel decreased 3.2% in January and it’s fallen 22.5% in the past three months.
A strong dollar is also helping to reduce the cost of foreign goods by making them cheaper for Americans to buy.
Big picture: U.S. inflation declined toward the end of 2018 largely owing to falling oil prices, but rapid growth in rents also tapered off and medical care rose at one of slowest rates on record. The drop in imported oil prices and other foreign goods is also lending a helping hand.
Waning inflation has spurred the Fed to put a hold on future increases in U.S. interest rates.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open modestly higher in Friday trades.
The 10-year Treasury yield
was little changed at 2.67%.