US import prices unchanged in May

WASHINGTON, June 17 (Reuters) - U.S. import prices were unchanged in May amid lower costs for energy products, but a weak dollar lifted prices elsewhere, which could eventually lead to higher domestic inflation.

The unchanged reading in import prices last month followed an unrevised 0.1% gain in April, the Labor Department's Bureau of Labor Statistics said on Tuesday.

Economists polled by Reuters had forecast import prices, which exclude tariffs, falling 0.2%.

In the 12 months through May, import prices rose 0.2%.

Data last week showed tame consumer and producer price readings in May. Economists say inflation has remained moderate as businesses are still selling inventory accumulated before President Donald Trump's sweeping tariffs on imports.

They expect the import duties will boost inflation in the second half of the year. The tariffs have raised fears of a slowdown in global growth, weighing on oil prices.

But that disinflationary impulse is likely over amid conflict between Israel and Iran, which has boosted oil prices.

Federal Reserve officials were scheduled to start a two-day policy meeting on Tuesday. The U.S. central bank on Wednesday is expected to leave its benchmark overnight interest rate in the 4.24%-4.50% range while policymakers monitor the economic impact of tariffs and tensions in the Middle East.

Imported fuel prices decreased 4.0% in May, falling for a third straight month. Food prices declined 0.3% after easing 0.1% in the prior month.

Excluding fuels and food, import prices increased 0.4%. That followed a 0.5% advance in April. In the 12 months through May, the so-called core import prices increased 1.3%.

Prices for imported capital goods gained 0.2%, while those of consumer goods excluding motor vehicles also rose 0.2%.

Prices for imported motor vehicles, parts and engines edged up 0.1%. A softening dollar is driving up these prices.

Trump's aggressive trade posture has shaken investors' confidence in the dollar, eroding the appeal of U.S. assets. The trade-weighted dollar is down about 6.2% this year.