U.S. headline import prices rise below expectations in April

U.S. imported inflation came in softer than anticipated in April. Sequentially, the headline import prices were up 0.2 percent, while it dropped 0.2 percent on a year-on-year basis. Stripping petroleum, import prices dropped 0.6 percent sequentially and 1 percent on a year-on-year basis.

Petroleum prices were up 6.1 percent sequentially and have been rising at a solid rate since the beginning of the year, making up the softness at the end of last year. Food prices rose strongly, but prices of capital goods, consumer goods and autos dropped sequentially and the annual trend has shifted to deflation for all, noted Barclays in a research report.

Imported inflation’s annual trend has softened in the past year. Some of that was mainly because of the drag from energy prices in late 2018, which drove headline import prices into deflation. But as negative energy base effects are beginning to fade, the direction of travel towards softer inflation has become evidently visible in less-volatile measures excluding fuels.

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