FX.co ★ U.S. Import Prices Decrease 0.4% In September, In Line With Estimates

The Labor Department has released its latest report, indicating a notable decrease in U.S. import prices for September, primarily driven by a significant decline in fuel import costs. The data reveals a 0.4 percent drop in import prices for the month, following a revised 0.2 percent decrease in August, aligning with the expectations set by economists.

Year-over-year, import prices slightly declined by 0.1 percent, marking the first annual decrease observed since February. According to Matthew Martin, Senior U.S. Economist at Oxford Economics, while import prices do not directly influence producer and consumer prices, this trend suggests subdued inflationary pressures, potentially supporting another interest rate cut in November.

The monthly reduction in import prices is largely attributed to a sharp 7.0 percent reduction in fuel import prices, following a 2.9 percent decline in the previous month. Excluding fuel imports, import prices experienced a modest increase of 0.1 percent for the third straight month.

The report further elaborates that heightened prices for non-fuel industrial supplies, consumer goods, and automotive vehicles compensated for the decline in costs of foods, feeds, and beverages.

On the export front, September saw a 0.7 percent decline in export prices, following a revised 0.9 percent drop in August, surpassing economists’ prediction of a 0.4 percent decline. Year-over-year, export prices diminished by 2.1 percent, the most substantial decrease since January.

This downturn in export prices is primarily due to non-agricultural exports, with prices falling by 0.9 percent in September after a 0.7 percent decline in August. Decreased costs for non-agricultural industrial supplies and automotive vehicles counteracted increases in capital goods, consumer goods, and non-agricultural foods.

Conversely, agricultural export prices increased by 0.6 percent in September, rebounding from a 2.1 percent drop in August, driven by rising prices for nuts, other food preparations, meat, wheat, and corn.