The Import Price Index declined 0.3% in May from April, and was down 1.5% year-over-year. Overall prices have fallen in part on increases in the value of the US dollar compared to trading partners, making imported goods cheaper. Energy prices — which are valued in US dollars — fell in May, with petroleum costs down 0.9% from April. Excluding petroleum, prices were down 0.3% month-over-month. The overall dip in import prices was as expected and should not worry markets about a larger-than-expected softening in price pressures.
Energy price declines were not restricted to petroleum. Prices were down 6.8% for natural gas and down 5.0% for other fuels.
The FOMC will not find much in the way of upward price pressures from imported goods in May. Prices for finished goods were barely changed. Capital goods prices were down 0.1% from the prior month, and down 1.3% compared to a year ago. Prices for motor vehicles and parts were down 0.1% month-over-month and down 0.6% from a year ago. Prices for consumer goods excluding motor vehicles were flat in May from April, and down 0.7% from May 2018.
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