Import prices fall 0.2 percent in August * Import prices excluding petroleum unchanged * Export prices decline 0.8 percent By Lucia Mutikani WASHINGTON, Sept 14 (Reuters) – U.S. import prices fell for the first time in six months in August on declining petroleum and food costs, pointing to a tame inflation environment that could encourage the Federal Reserve to keep interest rates steady next week. In August imports from the world’s second largest economy fell 0.2%, and have not shown an increase since December 2014 when prices rose 0.1%. Excluding fuel, import prices were unchanged from July.
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Import prices slipped 0.2 percent last month after gaining 0.1 percent in July. Export prices are 2.4% lower vs. a year ago. Fed Governor Lael Brainard said on Monday she wanted to see stronger consumer spending data and signs of rising inflation before raising interest rates. That, together with sluggish wage growth, has left inflation persistently running below the Fed’s 2 percent target. United States index futures are edging higher in pre-market trade, with the S&P 500 rising by 0.13% to 2,124.75.Gold is trading flat at $1,325, while WTI crude oil is lower by 0.73% to $4.56 per barrel ahead of today’s EIA inventory report.
“We expect an improvement in imported inflation to help stabilize domestic core goods prices in the coming months”.
The decline was led by a 9.5% decrease in soybean prices, although falling prices for fruit, vegetables, corn, and meat also contributed to the drop. There were also declines in the cost of imported goods from Canada, the European Union and Mexico.
Higher prices for non-fuel industrial supplies and materials offset lower prices for automotive vehicles, foods, feeds, and beverages, and consumer goods.
According to a Thomson Reuters analyst survey, on average expectations were for a smaller month-over-month drop of 0.1%.
Imports have also contributed to low USA inflation especially now that the Federal Reserve wants prices to rise.
Import fuel prices declined 12.2 percent between August 2015 and August 2016, and the price indexes for petroleum and natural gas each fell over the same period, 12.9 percent and 5.2 percent, respectively.
The cost of imported goods is 2.2% lower compared to one year ago.
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Over the past year all export prices have fallen 2.4%, the smallest annual decline since the price index dropped 1.7% YoY in November 2014.
