The price of goods imported into the U.S. rose in July but it was the weakest gain in five months and represented a swift drop from May’s surge that had been largest single month increase in four years.
Import prices, the final sales cost of the vast variety of items shipped into the country, from Korean cars to Nigerian crude oil and French perfume, climbed 0.1 percent last month, down from 0.6 percent in June and 1.2 percent in May, according to the Labor Department. Economists in the Bloomberg survey had predicted a 0.4 percent decline.
Over the year import prices fell 3.7 percent after sliding 4.7 percent in June. It was the smallest yearly drop since November's 2014’s 3.1 percent decline. Annual import prices have fallen for two straight years.
Movements in U.S. import prices tend to mimic a combination of the producer price index in China, the source of many consumer goods and the price of crude oil.
The price increase in July was due to higher costs for non-petroleum imports. A barrel of West Texas Intermediate crude oil dropped 13.9 percent in July and is down 23.1 percent on the year. The cost of oil imports fell 3.6 percent in July but the cost of all other imports except petroleum rose 0.5 percent, the largest monthly increase since April 2011. Outside the energy sector import prices are down 1.3 percent on the year.
Industrial supplies excluding oil rose 2.1 percent. Consumer goods prices fell 0.1 percent after falling 0.2 percent in June. Automobile prices fell 0.3 percent after being flat in June.
Chief Market Strategist
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