U.S. import prices fell more than expected in October as the cost of petroleum and a range of goods declined, a sign that a strong dollar and soft global demand continued to exert downward pressure on imported inflation.
The U.S. Labor Department said import prices dropped 0.5% last month after a 0.6% decline in September. Import prices have now fallen in 14 of the last 16 months.
In the 12 months through October, prices tumbled 10.5%. Dollar strength and a sharp decline in oil prices have weighed on inflation, which is persistently running below the Federal Reserve's 2% target.
Weak inflation pressures, however, are unlikely to deter the U.S. central bank from raising interest rates next month after job growth surged in October and the unemployment rate fell to a seven-and-a-half-year low of 5%
A tightening labour market could give Fed officials confidence that inflation will gradually move toward its target.
A Reuters survey of over 80 leading economists published on Tuesday showed a 70% median chance the Fed would raise its benchmark overnight interest rate at its Dec. 15-16 policy meeting.
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