FX.co ★ U.S. Import Price Unexpectedly Decrease 0.4% In May

A recent report from the Labor Department, released on Friday, revealed unexpected reductions in both U.S. import and export prices for May.

The data indicated that import prices dropped by 0.4% in May, following a significant 0.9% increase in April. Economists had anticipated a modest rise of 0.1% for May.

This decline in import prices can be partly attributed to a notable fall in fuel import prices, which plummeted by 2.0% after a substantial rise of 4.1% in April. Additionally, prices for non-fuel imports decreased by 0.3% in May, a contrast to the 0.7% increase observed in the previous month.

Contributing to the reduction in non-fuel import prices were lower costs for a range of categories including foods, feeds, beverages, non-fuel industrial supplies and materials, consumer goods, capital goods, and automotive vehicles.

Year-over-year, import prices in May saw a 1.1% increase, maintaining the same growth rate as recorded in April.

The Labor Department's report also highlighted a 0.6% decline in export prices for May, following a revised 0.6% increase in April. This was contrary to economists' expectations of unchanged export prices, previously reported to have risen by 0.5%.

The unexpected drop in export prices was primarily due to a reduction in non-agricultural export prices, which overshadowed the rise in agricultural export prices. Specifically, non-agricultural export prices fell by 0.8% in May, after a 0.7% increase in the prior month.

The report noted that the decrease in non-agricultural industrial supplies and materials prices in May more than compensated for the higher prices in capital goods, consumer goods, and non-agricultural foods.

Conversely, agricultural export prices rose by 0.5% in May, recovering from a 0.4% decline in April, driven by higher prices for wheat, fruit, corn, and meat.

Despite the monthly decline, export prices in May saw a 0.6% increase compared to the same month last year, marking the first annual rise since January.