US import prices unchanged in December
US IMPORT prices were unexpectedly unchanged in December after two straight monthly decreases, but the trend in imported inflation remained subdued.
The unchanged reading in import prices last month followed a revised 0.5 per cent decline in November, the Labor Department’s Bureau of Labor Statistics said on Wednesday (Jan 17). Import prices were previously reported to have fallen 0.4 per cent in November.
Economists polled by Reuters had forecast import prices, which exclude tariffs, would drop 0.5 per cent in December.
In the 12 months through December, import prices fell 1.6 per cent after declining 1.5 per cent in November. Annual import prices have now dropped for 11 consecutive months.
The government reported last week that rising shelter and health costs lifted consumer prices in December. Producer prices, however, declined for a third straight month.
Though overall inflation remains above the Federal Reserve’s 2 per cent target, financial markets are betting that the US central bank will start cutting interest rates in March amid some easing in labour market conditions.
Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25 per cent-5.50 per cent range.
Imported fuel prices slipped 0.3 per cent. That followed a 6.4 per cent plunge in November. The cost of imported food dipped 0.1 per cent after rebounding 1.0 per cent in the prior month.
Excluding fuels and food, import prices rose 0.1 per cent after being unchanged in November. These so-called core import prices dropped 1.0 per cent on a year-on-year basis in November.
The monthly increase, if sustained, could be an indication that goods price deflation is running its course. Consumer goods prices edged up in December and were unchanged excluding food and energy after six straight monthly declines.
Prices for imported capital goods fell 0.1 per cent last month, matching November’s drop. The cost of motor vehicles, parts and engines rebounded 0.1 per cent after easing 0.1 per cent in the prior month.
Consumer goods excluding automotives were unchanged for the fourth straight month. Prices of goods imported from China fell 0.1 per cent after declining 0.2 per cent in November. They fell 3.0 per cent on a year-on-year basis in December.
The report also showed export prices fell 0.9 per cent for the third month in a row in December. Export prices for agricultural commodities dropped 0.6 per cent amid lower prices for soybeans and other oilseeds, corn, meat and nuts, which more than offset higher fruit prices.
Non-agricultural export prices decreased 0.9 per cent. Export prices fell 3.2 per cent on a year-on-year basis in December, after dropping 5.2 per cent in November. REUTERS
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