Import Prices Pulled Higher by Petroleum
As the US dollar index hits fresh lows, the latest index tracking import prices moved up at a pace of 2% in August, twice as fast as forecasted. Despite increases in five of the past six months, prices are still down 15% since last year, compared with an annual drop of 19.3% reported in July.
“Although inflation is not a front-burner issue, the broad-based nature of the gains in prices in August underscore the influence that a weakening dollar can have on import prices,” noted analysts from RDQ Economics.
Not surprisingly, the culprit driving prices up was oil. Import prices of petroleum were up 10.5% in the month, marking the sixth advance in the past seven months. Even with those gains, however, petroleum prices were down 38.1% on the year.
Export prices are moving up too, but at a slower rate. The month saw export prices rise 0.7%, pushing the year-to-year change down two percentage points from the prior month to -6.1%.
Markets were unshaken by the release. Half an hour before the opening bell, equity futures continue to look up. Wall Street’s indifference can be attributed to the rather mild gain in non-petroleum import prices, which were up just 0.4%.
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