Import prices fell 1.3% last month after an upwardly revised 1.2% April surge. Consensus expectations had been for a 0.4% decline.

Petroleum prices slumped 6.5% in May and were the source of April's upward revision. In June, crude oil prices have recovered all of the May decline and moved to $53.18 for Brent Crude.

Import prices other than petroleum fell 0.3% last month though price declines were limited.

Prices for nonauto consumer goods rose 0.1% (+1.4% y/y) but capital goods prices were unchanged (-0.3% y/y). Excluding computers capital goods prices rose another 0.3% (2.7% y/y).

During the last ten years there has been a 66% (negative) correlation between the nominal trade-weighted exchange value of the US dollar vs. major currencies and the y/y change in non oil import prices. The correlation is a lower 47% against a broader basket of currencies and a lower 57% against the real value of the dollar.

Export prices reversed some of the prior month's gain with a 0.1% decline.