Import prices take a breather

Little in the way of pricing pressures from abroad

Import prices dived in the latest month, falling 0.7% in July after having risen in four of the last five months. A 2.8% decline in oil prices helped put the lid on import prices. Year-over-year, prices are down 19.3%.

Still, even without the help from a drop in petroleum, prices were down 0.2%, the first drop since April. Ex-petroleum, prices are off 7.3% from one year ago, underscoring the toll of the global recession on imported inflation.

But the dollar has been slipping lately and the global economy is showing signs of life, and that may put a soft floor under further declines.

With the exception of China and some emerging markets, economies are still weak and there is plenty of excess capacity out there. Despite the huge amounts of monetary and fiscal stimulus still in the pipeline, a new round of import-driven inflation seems unlikely in the short term.

A quick look at prices from major trading partners

Canada -1.0%
Europe 0.2%
Japan 0.1%
China -0.2%