U.S. Import Prices Increase More Than Expected As Fuel Prices Soar
Import prices in the U.S. increased by more than expected in the month of August, according to a report released by the Labor Department on Friday, with the report also showing a much bigger than expected surge in U.S. export prices.
The Labor Department said import prices climbed by 0.5 percent in August following a downwardly revised 0.1 percent uptick in July. The advance represents the largest increase in import prices since last May.
Economists had expected import prices to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.
The strong than expected import price growth reflected a spike in prices for fuel imports, which soared by 6.7 percent in August after jumping by 2.2 percent in July.
Prices for fuel imports saw the biggest monthly increase since March 2022 but were still down by 19.0 percent compared to the same month a year ago.
Meanwhile, the report said prices for non-fuel imports edged down by 0.1 percent in August, matching a revised dip in July.
The Labor Department said lower prices for non-fuel industrial supplies and materials, capital goods and automotive vehicles more than offset higher prices for foods, feeds, and beverages and consumer goods.
Compared to the same month a year ago, prices for non-fuel imports were down by 0.8 percent, while prices for all imports were down by 3.0 percent.
“While we don’t expect a reversal in oil prices in the months ahead, softer gains will support slower monthly advances in the fuel component, and waning goods demand should keep nonfuel import inflation on a downward trajectory,” said Matthew Martin, U.S. Economist at Oxford Economics.
The report also said export prices spiked by 1.3 percent in August after climbing by a downwardly revised 0.5 percent in July.
Economist had expected export prices to increase by 0.3 percent compared to the 0.7 percent advance originally reported for the previous month.
The sharp increase came as a 1.7 percent jump in prices for non-agricultural exports more than offset a 2.2 percent slump in prices for agricultural exports.
Despite the monthly surge, export prices were down by 5.5 percent compared to the same month a year ago, as prices for agricultural exports plunged by 7.8 percent and prices for non- agricultural exports tumbled by 5.3 percent.
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