US import prices dip in November, but trend is away from deflation

Import prices in the States slipped in November but the underlying trend was for a move away from deflation on the back of rising commodity prices and a waning dampening effect from strength in the US dollar, economists said.

The US import price index dipped by 0.3% month-on-month and 0.1% year-on-year, according to the Bureau of Labor Statistics.

Fuel import prices dropped at a 3.9% pace over the month and advanced by 2.7% on the year, while non-fuel import prices slipped 0.1% on the month and were down by 0.3% in comparison to the year ago month.

On the export side of the equation, prices of exports were off by 0.1% on the month and 0.3% over the past year.

Commenting on the data, Blerina Uruci at Barclays Research said: "Compared with a year ago, nonpetroleum import prices fell 0.2% y/y, a significant improvement from the strong deflationary trend in 2014 and 2015. The recent upward trend suggests that the impulse from the dollar appreciation has faded.

"We maintain our view that import prices will gradually move away from deflation territory in the coming months, following improving global commodity prices and the gradual waning of the effect of a stronger dollar."

As of 1403 GMT the yield on the benchmark 10-year US Treasury note was lower by three basis points to 2.44%.