WASHINGTON (Reuters] – The U.S. imported prices fell unexpectedly in April due to a drop in oil costs. However, this is a signal that inflation has likely peaked.

According to Friday’s Labor Department report, import prices remained unchanged despite a 2.9% increase in March. Import prices increased 12.0% between March and April after rising 13.0% year-over-year. Reuters economists polled had predicted that import prices would increase 0.6%, which does not include tariffs.

The import prices rose 6.8% in the second quarter.

According to government data, the pace at which consumer prices rose in the last eight months was slowest since September. However, the increase in producer prices has been the most modest since September.

Oil prices rising in May means that monthly producer, import and consumer prices will rise. The Federal Reserve is likely to maintain its 2% inflation rate, but the annual inflation rate will continue to decline.

This is mostly due to the large increases that were excluded from the calculations last year.

Last week the Fed increased its policy interest rates by half of a percentage point. This was the highest increase in 22 years. The Fed also stated that it would start trimming its bond holdings starting next month. Since March, the U.S. central banks has been raising rates.

The import fuel price dropped by 2.4% after rising 17.3% in March. The price of petroleum declined by 2.9% while import food prices increased 0.9%. The March gain was matched by 0.4% in the prices of import capital goods. Prices of import consumer goods, excluding motor vehicles, remained unchanged. The prices of motor vehicle parts and imported motor vehicles rose 0.3%

Import prices increased 0.4%, excluding fuel and food. Core import prices rose by 1.3% in March. These prices increased 6.9% year-on-year in April.

A slowdown of monthly core import prices gains may be due to the strength of the US dollar against currencies of its main trading partners. Since the Fed raised interest rates, the greenback gained 2.65% on a weighted trade basis.

After rising 0.5% by March, the price of imported goods from China rose 0.2%. They rose 4.6% year-on-year.

Also, export prices rose 0.6% to April from 4.1% in March. Export prices rose 1.1% in April, which is slower than March’s 4.3% acceleration. More than the higher prices paid for rice, beans, cotton, meat and other nuts in April were offset by lower wheat prices.

The nonagricultural export price rose by 0.5%. In April, export prices increased by 18.0% year-over-year. This follows an 18.6% increase in March.