WASHINGTON (Reuters) – U.S. import prices fell for the second month in a row in August, on lower costs for petroleum products and a stronger dollar, which could help bring down inflation over time.
The Labor Department said Thursday that import prices fell 1.0% last month after falling 1.5% in July. In the 12 months through August, import prices rose 7.8% after rising 8.7% in July. Economists polled by Reuters had expected import prices, which exclude tariffs, to fall 1.2 percent on the month.
In the wake of data released on Wednesday showing a second monthly decline in producer prices in August, weaker import prices should calm fears of entrenching inflation.
Earlier this week, the government announced an unexpected increase in consumer prices in August, boosting expectations for a third rate hike by 75 basis points from the Federal Reserve next Wednesday.
The fall in import prices also indicates an easing of bottlenecks in the global supply chain.
Imported fuel prices fell 6.8% last month after falling 7.5% in July. Petroleum prices decreased by 7.1%, while the cost of importing foodstuffs decreased by 1.6%.
Excluding fuel and food, import prices fell 0.1%. Alleged core import prices fell 0.5% in July. It rose 3.8% year-on-year in August. A stronger dollar helps limit the increase in the prices of essential imports.
The dollar has risen 7.5% against the currencies of major US trading partners since January.
The report also showed export prices fell 1.6% in August after declining 3.7% in July. Agricultural export prices declined 0.4% as lower corn, fruit, meat and wheat prices offset higher soybeans and vegetables. Prices of non-agricultural exports fell 1.8%. Export prices rose 10.8% y/y in August after rising 12.9% in July.