U.S. imported inflation subdued as petroleum, auto prices fall

WASHINGTON (Reuters) - U.S. import prices fell in July as a decline in the cost of petroleum products offset a rebound in food prices, keeping a lid on imported inflation pressures. The Labor Department said on Thursday import prices decreased 0.2 percent last month after June's unrevised 0.1 percent gain. Economists polled by Reuters had forecast import prices falling 0.3 percent in July. In the 12 months through July, prices increased 0.8 percent. Sluggish global demand is keeping imported inflation subdued, but domestic price pressures are steadily rising. That and a gradually tightening labor market has left some economists anticipating an early interest rate increase from the Federal Reserve. Imported petroleum prices fell 1.2 percent in July, the largest decline since November, after rising 1.1 percent the prior month. Imported food prices increased 1.0 percent. Food prices had declined 1.6 percent in June. Import prices excluding petroleum were flat in July. Imported inflation was also dampened by a 0.8 percent fall in the price of automobiles, the largest drop since December 1992. The Labor Department report also showed export prices were unchanged in July after falling 0.4 percent in June. In the 12 months through July, export prices rose 0.4 percent. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)