Import prices in the U.S. saw further downside in the month of August, according to a report released by the Labor Department on Thursday.
The Labor Department said import prices slid by 1.0 percent in August after tumbling by a revised 1.5 percent in July.
Economists had expected import prices to decrease by 1.2 percent compared to the 1.4 percent slump originally reported for the previous month.
The continued decline in import prices largely reflected another steep drop in prices for fuel imports, which plunged by 6.8 percent in August after plummeting by 7.5 percent in July.
Excluding fuel imports, however, non-fuel import prices still edged down by 0.2 percent in August after falling by 0.5 percent in July.
Lower prices for foods, feeds, and beverages, non-fuel industrial supplies and materials and automotive vehicles more than offset higher prices for consumer goods.
Compared to the same month a year ago, import prices were up by 7.8 percent in August, reflecting the smallest annual increase since March 2021.
“While yesterday’s PPI report and today’s import prices are encouraging, they are not enough to offset the broad-based CPI report earlier in the week, which keeps the Fed on track to raise rates 75bps next week and at least another 75bps by year end,” said Matthew Martin, U.S. Economist at Oxford Economics.
“Higher rates and slowing of domestic demand should help support the easing of import prices for the remainder of the year,” he added. “However, the potential energy crisis in Europe will lend upside risk as we enter the winter months.”
Meanwhile, the report showed export prices dove by 1.6 percent in August after plummeting by a revised 3.7 percent in July.
Export prices were expected to decline by 1.1 percent compared to the 3.3 percent plunge originally reported for the previous month.
Prices for non-agricultural exports tumbled by 1.8 percent amid lower prices for non-agricultural industrial supplies and materials and non-agricultural foods.
Lower prices for corn, fruit, meat, and wheat also contributed to a 0.4 percent dip in prices for agricultural exports.
The Labor Department also said the annual rate of growth in export prices slowed to 10.8 percent in August from 13.1 percent in July.
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