U.S. Import Prices Unexpectedly Decrease For First Time Since Late 2020
September 15 2021 - 5:19AM
RTTF2
Reflecting a sharp pullback in fuel prices, the Labor Department
released a report on Wednesday unexpectedly showing a decrease in
U.S. import prices in the month of August.
The Labor Department said import prices fell by 0.3 percent in
August after climbing by an upwardly revised 0.4 percent in July.
Import prices decreased for the first time since October of
2020.
The drop surprised economists, who had expected import prices to
rise by 0.3 percent, matching the increase originally reported for
the previous month.
The unexpected decrease in import prices came as prices for fuel
imports plunged by 2.3 percent in August after spiking by 3.0
percent in July. The downturn was mostly driven by lower petroleum
prices.
Excluding the steep drop in prices for fuel imports, prices for
non-fuel imports still edged down by 0.1 percent in August after
inching up by 0.1 percent in July.
Prices for non-fuel imports showed their first decrease since
November 2020, as a drop in prices for non-fuel industrial supplies
and materials more than offset higher prices for automotive
vehicles, foods, feeds, and beverages, capital goods, and consumer
goods.
"Looking ahead, import price inflation will remain sticky in the
near term until pandemic disruptions are resolved, especially with
major trade partners like China where activity has slowed amid
strict virus containment," said Mahir Rasheed, U.S. Economist at
Oxford Economics.
He added, "However, decelerating import price inflation confirms
that price dynamics will continue normalizing on fading base
effects, softer domestic demand, and a steady dollar."
Meanwhile, the report said export prices increased by 0.4
percent in August after jumping by a downwardly revised 1.1 percent
in July.
Economists had expected export prices to advance by 0.5 percent
compared to the 1.3 percent surge originally reported for the
previous month.
Prices for agricultural exports showed a notable rebound,
shooting up by 1.1 percent in August after tumbling by 1.7 percent
in July.
The Labor Department said prices for non-agricultural exports
also edged up by 0.2 percent in August after jumping by 1.4 percent
in the previous month.
Compared to the same month a year ago, import prices in August
were up by 9.0 percent, while export prices were up by 16.8
percent.
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