US import prices rose for the third consecutive month in May, suggesting that rising oil prices and the falling US dollar exchange rate have seriously reduced the risk of deflation.

According to the US Labour Department, import prices rose 1.3% last month from April - the largest monthly rise since July 2008.

Nonetheless, import prices remain 17.6% down on May 2008, which is the largest single year drop since the inaugural index was published in 1982.

Reports next week on US producer and consumer prices will indicate just how far the recent rise in import prices is spreading through the rest of the US economy.

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