US import prices declined further in August, with the subdued trend in prices broadly based across components. Total import prices were down 1.8% m/m, a slightly larger decline than (-1.5%) and consensus expectations (-1.6%). Petroleum and petroleum product prices fell 14.2% m/m, as the recent sharp decline in crude prices lowered import costs. Nonpetroleum import prices were also subdued falling 0.4% m/m, the second consecutive negative reading. Consumer and capital goods prices were down 0.4% and 0.1%, respectively.
Prices of imported autos and parts decline 0.2% on the month. Food and beverage prices rose 0.3% on the month, the only major price item to report an increase. But, on a y/y basis prices declined at a rate of 3.0%, consistent with continued soft food price inflation.
"Today's report suggests that import price pressures remain subdued and we think this is in large due to the strengthening of the dollar as well as gloomy economic activity abroad", says Barclays.
