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US import prices unexpectedly rise, but trend still weak
[WASHINGTON] US import prices unexpectedly rose in July, but the underlying trend continued to be weak, pointing to subdued imported inflation pressures.
The report from the Labour Department on Wednesday suggested inflation could remain moderate despite a broad increase in consumer prices in July, which could allow the Federal Reserve to cut interest rate further to limit the damage to the economy from trade tensions.
The Trump administration on Tuesday delayed imposing a 10 per cent import tariff on laptops, cell phones, video game consoles and a wide range of other products made in China until mid-December, saying the move was to avoid hurting American shoppers heading into the Christmas holiday.
Economists said the delay of the duties, which had been scheduled to kick off on Sept 1, still left a cloud over the economy. Fears about the impact of the trade war on the US economic expansion, the longest in history, prompted the Fed to cut its short-term lending rate by 25 basis points last month for the first time since 2008.
Import prices increased 0.2 per cent last month as a rebound in the cost of petroleum products offset declines in prices for capital goods and motor vehicles, the government said. Data for June was revised down to show import prices dropping 1.1 per cent instead of falling 0.9 per cent as previously reported.
Economists polled by Reuters had forecast import prices would be unchanged in July. In the 12 months through July, import prices dropped 1.8 per cent after decreasing 2.0 per cent in June. Import prices exclude tariffs.
In July, prices for imported fuels and lubricants rebounded 1.8 per cent after falling 7.3 per cent in the prior month. Petroleum prices increased 1.9 per cent after plunging 7.0 per cent in June. Imported food prices fell 0.5 per cent, the third straight monthly drop.
Excluding fuels and food, import prices were unchanged last month after dropping 0.2 pwer cent in June. The core import prices fell 1.5 per cent in the 12 months through July.
The cost of imported capital goods decreased 0.1 per cent last month after falling 0.2 per cent in June. The price of imported motor vehicles and parts declined 0.3 per cent last month.
Prices for imported consumer goods excluding automobiles rose 0.2 per cent after being unchanged in June.
The cost of goods imported from China dipped 0.1 per cent last month after falling 0.2 per cent in June. Prices fell 1.6 per cent in the 12 months through July, matching June's decline.
The report also showed export prices rose 0.2 per cent in July, boosted by gains in prices for agricultural and nonagricultural products, after declining for two straight months. Export prices fell 0.9 per cent on a year-on-year basis in July after decreasing 1.6 per cent in June.
Prices for exported agricultural products rose 0.4 per cent, lifted by a surge in prices for soybeans, other animal feeds, nuts and vegetables. Prices for agricultural products jumped 3.7 per cent in the 12 months to July, the largest advance since June 2017.
Prices for exported nonagricultural goods rose 0.2 per cent in July after tumbling 1.0 per cent in June. In the 12 months through July, prices dropped 1.5 per cent.