U.S. Import Prices Dip 0.3% In August, Slightly More Than Expected

A report released by the Labor Department on Friday showed import prices in the U.S. decreased by slightly more than expected in the month of August.

The Labor Department said import prices fell by 0.3 percent in August after inching up by 0.1 percent n July. Economists had expected import prices to dip by 0.2 percent.

Prices for fuel imports led the way lower, plunging by 3.0 percent in August after jumping by 1.1 percent in July amid lower prices for petroleum and natural gas.

However, prices for non-fuel imports also edged down by 0.1 percent in August after ticking up by 0.1 percent in July.

Lower prices for non-fuel industrial supplies and materials; consumer goods; and foods, feeds, and beverages more than offset higher prices for capital goods.

The Labor Department also said the annual rate of import prices growth slowed dramatically to 0.8 percent in August from 1.6 percent in July.

“Imports price don’t feed one for one into consumer prices, but the August report is yet another signal to the Fed that inflation pressures are abating and supports a series of rate cuts beginning next week,” said Matthew Martin, U.S. Economist at Oxford Economics.

The report also showed a notable decline by export prices, which slid by 0.7 percent in August after climbing by a downwardly revised 0.5 percent in July.

Economists had expected export prices to edge down by 0.1 percent compared to the 0.7 percent increase originally reported for the previous month.

Prices for agricultural exports tumbled by 2.0 percent for the second straight month, while prices for non-agricultural exports fell by 0.6 percent in August after climbing by 0.8 percent in July.

Compared to the same month a year ago, export prices were down by 0.7 percent in August following a 1.4 percent jump in July.