US import prices decline in July

The fall in US import prices accelerated modestly in July, after falling 0.1% in June. Total import prices were down 0.9% m/m, above both (-1.5%) and consensus expectations (-1.2%). Petroleum and petroleum product prices fell 5.9% m/m, as the recent decline in crude prices weighed on import costs. Nonpetroleum import prices fell a more modest 0.3% m/m. Food and beverage prices were flat on the month; but, the y/y change still declined to 1.7%, suggesting ongoing subdued food price pressures.

Prices of imported autos and parts were also flat on the month and have fallen 1.4% y/y. Prices of consumer and capital goods declined 0.3% and 0.2% m/m, respectively. Overall and consistent with past dollar appreciation and tepid economic activity abroad, import price pressures remain subdued.

"However, the drag on prices from the sharp appreciation of the dollar last year is waning. Further, while import prices have responded as expected to changes in the value of the dollar, the subsequent pass through to US consumer prices has been modest as rising US demand has offset some of the weakness from abroad", says Barclays.