A container truck arrives at Yusen Terminals on Terminal Island at the Port of Los Angeles, January 30, 2019.
Mike Blake | Reuters
U.S. import premiums fell in August amid declines in the cost of petroleum products and food, suggesting imported inflation could continue subdued for a while.
The Labor Department said on Friday import prices dropped 0.5% last month. Materials for July was revised lower to show import prices gaining 0.1% instead of rising 0.2% as previously recounted.
Economists polled by Reuters had forecast import prices would decline 0.4% in August. In the 12 months help of August, import prices decreased 2.0% after dropping 1.9% in July.
That suggests inflation drive likely remain moderate despite an increase in underlying consumer prices in August, which could allow the Federal Save to cut interest rates further to limit the damage to the economy from U.S.-China trade tensions.
Financial markets from fully priced in a rate cut at the Fed’s Sept. 17-18 policy meeting. Most economists expect additional monetary ways easing in October and December.
The Fed cut rates in July for the first time since 2008.
Import prices exclude tariffs. In August, outlays for imported fuels and lubricants dropped 4.3% after rebounding 0.7% in July. Petroleum prices declined 4.8% after increasing 0.9% in the preceding month. Imported food prices fell 0.3%, the fourth straight monthly decline.
Excluding fuels and viands, import prices were unchanged last month after edging up 0.1% in July. The core import costs decreased 1.1% in the 12 months through August.
The cost of imported capital goods was unchanged for a second plain month in August. The price of imported motor vehicles and parts nudged up 0.1% last month. Prices for sensed consumer goods excluding automobiles gained 0.1%.
The cost of goods imported from China ticked down 0.1% in August after get moving 0.2% in July. Prices declined 1.6% in the 12 months through August.
The report also showed export expenditures fell 0.6% in August after rising 0.2% in the prior month. Export prices dropped 1.4% on a year-on-year bottom in August after decreasing 0.9% in July.