U.S. import prices rose less than expected in July as an increase in the cost of petroleum was offset by the biggest drop in the price of non-petroleum goods in nearly 4-1/2 years, pointing to benign inflation pressures.

Import prices gained 0.2 percent last month, the Labor Department said on Tuesday, snapping four straight months of declines. June's data was revised to show a 0.4 percent drop instead of the previously reported 0.2 percent fall.

Economists polled by Reuters had expected prices to rebound 0.6 percent last month.
In the 12 months to July, import prices were up 1.0 percent.

Stripping out petroleum, import prices fell 0.5 percent, the largest fall since March 2009. That likely reflected a strengthening in the dollar in recent months.

The tame inflation environment will be scrutinized by the Federal Reserve as it considers trimming its massive monthly bond purchases later this year.

Most economists anticipate the U.S. central bank, which has said it expects inflation to start trending up, will make an announcement in September on the future of the $85 billion in bonds it is purchasing each month to keep borrowing costs low.

Last month, imported petroleum prices increased 3.2 percent after falling 0.8 percent in June.

Imported food prices edged up 0.2 percent after declining 1.0 percent the prior month.

Elsewhere, imported capital goods prices barely rose after dipping in June. Prices for automobiles fell 0.5 percent, the largest decline since December 1992.

The Labor Department report also showed export prices slipped 0.1 percent last month, falling for a fifth consecutive month. Export prices had dipped 0.1 percent in June.