Economists had forecast import prices falling 1.1 percent after a previously reported 0.1 percent dip in June.
In the 12 months through July, prices dropped 10.4 percent.
Read MoreRetail sales rose 0.6% in July
Last month, imported petroleum prices fell 5.9 percent after rising 1.6 percent in June.
Import prices excluding petroleum fell 0.3 percent, also reflecting the impact of a strong dollar. The dollar has gained 15.7 percent against the currencies of the United States` main trading partners since June 2014, mainly on expectations the Federal Reserve will raise interest rates this year.
In July, imported food prices were unchanged after dropping 0.7 percent in June. Prices for imported capital goods fell 0.2 percent and were unchanged for automobiles.
The report also showed export prices slipped 0.2 percent last month after falling 0.3 percent in June. Export prices dropped 6.1 percent in the 12 months through July.
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