© Reuters. FILE PHOTO: People shop in a supermarket as rising inflation affects consumer prices in Los Angeles, California, U.S., June 13, 2022. REUTERS/Lucy Nicholson
By Lucia Mutikani
WASHINGTON (Reuters) -U.S. import prices increased more than expected in August as the cost of energy products surged, but underlying imported price pressures remained subdued, which bodes well for the overall domestic inflation outlook.
Import prices increased 0.5% last month, the Labor Department said on Friday. Data for July was revised lower to show prices rising 0.1% instead of the previously reported 0.4%. Economists polled by Reuters had forecast import prices, which exclude tariffs, gaining 0.3%.
In the 12 months through August, import prices dropped 3.0% after decreasing 4.6% in July. Annual import prices have now declined for seven straight months.
Data this week showed inflation making steady progress toward the Federal Reserve’s 2% target, with underlying consumer and producer prices rising moderately in August.
A jump in gasoline prices, however, boosted overall consumer and producer prices. The U.S. central bank is expected to leave interest rates unchanged next Wednesday. Since March 2022, the central bank has raised its benchmark overnight interest rate by 525 basis points to the current 5.25%-5.50% range.
Imported fuel prices accelerated 6.7% last month, the largest increase since March 2022, after rising 2.2% in July. Food prices gained 0.7%. Excluding fuels and food, import prices decreased 0.2% after a similar decline in July.
These so-called core import prices dropped 1.3% on a year-on-year basis in August.
Prices for imported capital goods fell 0.2% in August. Imported motor vehicle prices dipped 0.1%. The cost of imported consumer goods excluding motor vehicles rebounded 0.1%.
Prices of goods imported from China rose 0.1%, the first increase since October 2022. Chinese import prices were down 2.2% on a year-on-year basis in August.
There were also monthly increases in the prices of goods imported from Canada, the European Union and Mexico.
The report also showed export prices shot up 1.3% in August, the biggest gain since May 2022, after rising 0.5% in July. Prices for agricultural exports decreased 2.2%, pulled down by lower prices for soybeans, corn, wheat and nuts.
Nonagricultural export prices increased 1.7%, also the biggest advance since May 2022. They were boosted by higher prices for nonagricultural industrial supplies and materials, capital goods and automotive vehicles, which more than offset lower prices for consumer goods and nonagricultural foods.
Export prices fell 5.5% on a year-on-year basis in August after declining 8.0% in July.
