This phenomenon is a clear indication that inflationary pressures on the economy are diminishing.
Key to inflation and Fed rates: US import prices accentuate fall in June
In June, the prices of imports in USA experienced a significant decline due to declines in several sectors, which more than offset the increase in the cost of fuels. This phenomenon is a clear indication that inflationary pressures on the economy are declining.
According to the Labor Department report published this Friday, import prices registered a 0.2% drop last month. It should be noted that the data for May was revised, revealing a decrease of 0.4% instead of the previously announced 0.6%.
The economists surveyed by Reuters They had predicted a drop in 0.1% on import prices, excluding tariffs. Compared to June of the previous year, import prices have fallen by 6.1%, marking the largest year-on-year decline since May 2020when a decrease of 5.7% was registered in May.
Annual import prices have shown a downward trend for five consecutive months. This report builds on data this week indicating that consumer and producer prices rose moderately in June, suggesting that the economy is entering a disinflationary environment.
Although inflation still remains above the 2% target set by the Federal Reserve, Easing inflationary pressures have led most economists to believe that the next interest rate hike, scheduled for this month, would be the last in the US central bank’s fastest monetary tightening cycle since the 1980s. .
In June, the Federal Reserve decided not to raise rates, after raising them by 500 basis points since March 2022.
Source: Ambito
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