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Import prices fall for second month
Prices fall 0.2% as crude-oil, natural-gas prices decline
By Rex Nutting, MarketWatch


WASHINGTON (MarketWatch) -- Prices of goods imported in the United States fell for the second consecutive month in December as petroleum prices dropped again, the Labor Department said Thursday.

Import prices fell 0.2% in December after a revised 1.8% decline in November.

According to the MarketWatch survey, economists were expecting import prices to rise 0.1%. See Economic Calendar.

Excluding petroleum, import prices were unchanged in December. Excluding all fuels, prices increased 0.2%.

In the past 12 months, import prices are up 7.9%, compared with a 6.7% increase in 2004. Import prices excluding petroleum have risen 2.4% in the past 12 months, down from a 3.7% gain in 2004.

Export prices, meanwhile, increased 0.1% in December. Excluding agricultural goods, export prices increased 0.1%. In the past 12 months, export prices are up 2.7%.

In other reports released Thursday, the Commerce Department said the U.S. trade deficit narrowed sharply to $64.2 billion in November on record exports. See full story.

In another report, the Labor Department said first-time jobless claims rose by 17,000 to 309,000 last week. See full story.

Petroleum prices fall

Imported petroleum prices dropped 0.9% in December, the third straight decline. Imported natural gas prices fell 4.7%.

Outside of energy, price pressures continued for some raw materials.

Prices of nonfuel industrial supplies continued to climb, rising 0.8% in December. Plastics prices rose 2%. Building-materials prices increased 0.8%. Prices of foods and feeds increased 1.5%.

Prices of finished imports, however, were tame. Capital-goods prices dropped 0.1% and are down 1.1% in the past year. Imported consumer-goods prices were flat, as were imported auto prices.

Import prices fell for most major U.S. trading partners, except Mexico, where prices increased 0.7%.

The Federal Reserve has boosted short-term rates 13 times in the past 19 months in a bid to keep a lid on inflationary pressures. Read more about the Fed.

The U.S. government had been running a de facto weak dollar policy to encourage higher prices for imported goods, both to fight possible deflation and to strengthen the competitiveness of U.S.-made goods. After strengthening earlier in the year, the dollar has weakened.

Import prices from Canada dropped 0.7% on the decline in natural gas and oil. Prices from the European Union fell 0.1%, the fourth decline in the past five months.

Prices of Chinese imports fell 0.1%, while prices of Japanese imports fell 0.2%.