WASHINGTON U.S. import prices fell in June as an increase in the cost of fuels was more than offset by declines elsewhere, the latest indication that inflationary pressures in the economy are abating.

Import prices dropped 0.2% last month, the Labor Department said on Friday. Data for May was revised to show import prices declining 0.4% instead of 0.6% as previously reported.

Economists polled by Reuters had forecast import prices, which exclude tariffs, dipping 0.1%. In the 12 months through June, import prices tumbled 6.1%. That was the biggest year-on-year decline since May 2020 and followed a 5.7% drop in May.

Annual import prices have now decreased for five straight months. The report added to data this week showing consumer and producer prices rising moderately in June in suggesting that the economy is shifting into a disinflationary environment.

Though inflation remains above the Federal Reserve's 2% target, easing price pressures have left most economists believing that an expected interest rate hike this month would be the last in the U.S. central bank's fastest monetary policy tightening cycle since the 1980s.

The Fed skipped raising rates in June after hiking its policy rate by 500 basis points since March 2022.

(Reporting by Lucia Mutikani, editing by Christina Fincher)