US import prices drop for first time since December 2020

The cost of goods purchased overseas registered its first outright decline in year-on-year terms in February since December 2020.

According to the US Department of Labor, the country's import price index dipped by 0.1% month-on-month (consensus: -0.2%) and by 1.1% in annual terms.

The latter was the result of a two percentage point swing in comparison to the previous month.

January's increase in import prices was revised lower by three tenths of a percentage point to -0.4%.

Fuel import prices accounted for all of the decline, dropping once more by 4.9% on the month, while non-fuel import prices increased by 0.4%.

"Import prices have entered a disinflationary cycle, propelled lower by declining fuel prices which have fallen precipitously since their initial spike at the onset of the war in Ukraine," said Matthew Martin and Ryan Sweet at Oxford Economics.

"As those base effects intensify, annual import price inflation will fall more deeply into negative territory."