US import prices decline modestly in September

US import prices fell less than expected in September, with the upside surprise relative to forecast coming from both petroleum and non-petroleum prices. Total import prices declined a modest 0.1% m/m, less than our (-0.6%) and consensus (-0.5%) expectations. Petroleum and petroleum product prices rose 1.1% m/m, after declining sharply in both August and July.

"We had expected a 1.0% decline. Nonpetroleum import prices fell 0.2% m/m - the ninth consecutive negative reading, although, the rate of decline slowed from recent months", says Barclays.

Outside of food and beverage, most non-petroleum categories reported only modest changes in prices. Consumer and industrial supplies prices were each up 0.1% m/m.  Prices of imported autos and parts were flat on the month and prices of capital goods were down 0.1%. Food and beverage prices fell 0.8% m/m. The continued downward trend in imported inflation meant that non-petroleum prices fell 3.3% y/y (previous 3.2%) and total import prices were down 10.7% (previous 11.3%).

"After strong declines in both petroleum and non-petroleum prices for two consecutive months, today's report suggests a significant slowing in the rate of imported deflation. However, we think that following dollar strength and amid uncertainty about economic activity abroad, imported price pressures are likely to remain subdued in the coming months and act as a drag on consumer goods prices", added Barclays.