June import prices post first decline in a year

WASHINGTON (Reuters)-the latter did so in June for the first time in a year when oil and food costs could according to the Government report on Wednesday proposed in handelsvara-driven spike in inflation was about to slow down.

Import prices fell a total of 0.5%, breaking eight straight months of increases, the Department of Labor said, after winning a 0.1% in May.

Economists surveyed by Reuters had expected prices to drop 0.6% last month. Import prices was 13.6% during the 12 months through June.

Stripping fuel and food prices, was flat after rising 0.6 percent in May and the report supported the claim by the Federal Reserve officials and independent economists that handelsvara-induced jump in inflation would be temporary.

Data on Thursday is expected to show that wholesale prices fell 0.2 percent in June from may, a survey by Reuters. Producer prices index increased 0.2 percent in May.

High inflation undercut economic activity during the first quarter, with growth slowing sharply to an annual rate of 1.9% after a lively 3.1 percent expansion over the last three months of 2010.

Information indicates thus far, the still-high commodity prices and disturbances in motor vehicle production due to a lack of parts from Japan helped to keep growth sluggish during the quarter April-June.

Last month, a 1.6% decrease in prices of imported petroleum contributed to put downward pressure on import prices. The reduction of petroleum in June was the largest in a year and followed 0.9% fall in May.

Imported food prices fell 1.9%, the biggest fall in more than two years, after sliding 0.7% in May.

The price of imported motor vehicles and parts increased 0.3% last month after rising 0.5 percent in May and the increase in motor vehicle prices reflect the lingering effects of chain supply disruption after March earthquake in Japan.

Labor Department report showed export prices edged up 0.1 percent in June after rising 0.2% the previous month. Analysts had expected prices to be 0.2%.

(Reporting by Lucia Mutikani, Edited by Andrea Ricci)