In April, petroleum prices in the US continued to increase, while the US dollar depreciated. Both the factors are expected to have contributed to a rise in the import price index by 0.8%, said Societe Generale in a research report. If the aforementioned projection happens, this will be the first time that the index will have witnessed consecutive gains since June 2015. Stripping petroleum, import price index might want to lose April’s consumer goods decline of 0.3% in March.
A considerable share of this drop is likely to reverse that will increase aggregate nonpetroleum import prices for the first time in one and a half years. It seems that the US economy has averted importing deflation. Inflation pressures are expected to continue increasing in H2 2016.
Meanwhile, the headline retail sales in April is expected to have grown 0.9%, added Societe Generale. Marked increase in autos and sales at gasoline stations are expected to have driven the likely increase in retail sales. Auto sales recovered in April by 5.2% following a decline of 5.6% in the prior month, while gasoline station sales are expected to have increased due to a marked rise in prices at the pump. Stripping autos and gasoline, retail sales are likely to have grown 0.3%.
