US import prices rise, but inflation pressures still muted

US import prices rose in February after seven months of declines as the cost of petroleum increased, but there was still little sign of imported inflation pressures. 

PHOTO: AFP

12 Mar9:00 PM

[WASHINGTON] US import prices rose in February after seven months of declines as the cost of petroleum increased, but there was still little sign of imported inflation pressures.

The Labour Department said on Thursday import prices gained 0.4 per cent after a revised 3.1 per cent plunge in January.

Economists polled by Reuters had forecast import prices rising 0.2 per cent after a previously reported 2.8 per cent decline in January.

In the 12 months through February prices fell 9.4 per cent.

Between June and January, crude prices fell 60 per cent on fears of a global oil glut and the refusal of Saudi Arabia and other OPEC members to cut output. Last month, Brent stabilized at around US$60 and US crude at around US$50.

Last month, imported petroleum prices rose 8.1 per cent after tumbling 20.6 per cent in January. Imported food prices dipped 0.2 per cent after sliding 1.6 per cent in January.

Import prices excluding petroleum fell 0.4 per cent in February after January's 0.6 per cent drop.

That reflects the dollar's strength against the currencies of the country's main trading partners, which is contributing to keeping inflation below the Federal Reserve's 2 per cent target.

The Labour Department report also showed export prices dipped 0.1 per cent in February after falling 1.9 per cent in January. Export prices dropped 5.9 per cent in the 12 months through February.

REUTERS

      

US business inventories flat, inventory-to-sales ratio highest since 2009

12 Mar10:13 PM

[WASHINGTON] US business inventories were unchanged in January and further declines in sales pushed the number of months it would take to clear shelves to the highest since July 2009, which suggests a stock drawdown in the months ahead.

The Commerce Department said on Thursday business inventories were also unchanged in December after previously being reported to have increased 0.1 per cent.

Economists polled by Reuters had forecast inventories gaining 0.1 per cent in January.

Inventories are a key component of gross domestic product. Retail inventories excluding autos, which go into the calculation of GDP, edged up 0.1 per cent after being flat in December.

That could see economists lower their first-quarter GDP growth estimates. Growth forecasts for the January-March quarter currently range between an annualized pace of 1.7 per cent and 2.5 per cent.

Economic activity early in the year was hurt by a harsh winter and the now-settled labor dispute at the country's West Coast ports, which disrupted the supply chain. The economy grew at a 2.2 per cent pace in the fourth quarter.

In January, business sales fell 2.0 per cent, the biggest decline since March 2009, after falling 1.0 per cent in December.

At January's sales pace, it would take 1.35 months for businesses to clear shelves, the highest inventory-to-sales ratio since July 2009.

The rise in the ratio from 1.33 in December could be a sign that inventories are now probably approaching levels that might make businesses uncomfortable about adding more stocks.

That could mean some cutting back in the months ahead.

REUTERS