U.S. import prices rise above expectations in September

Import prices in the U.S. came in above consensus expectations in the month of September. Sequentially, import prices rose 0.5 percent, as compared with the consensus expectations of a rise of 0.2 percent. The rise was mainly due to a sharp increase in energy prices. Meanwhile, the headline import prices, on a year-on-year basis rose 3.5 percent, reflecting a 32.1 percent year-on-year rise in the petroleum component.

Import prices, stripping petroleum, came in flat in September, as compared with the expectation of a fall of 0.1 percent. On a year-on-year basis, it rose modestly by 0.6 percent. Up to now, there has been little evidence that the tariffs imposed by the U.S. on Chinese goods in June are exerting considerable upward pressure on domestic prices.

“Import prices do not directly include duties and tariffs and we have noticed the price index for US imports from China fell 0.1 percent m/m in September (0.4 percent y/y), following a similar move in August and July and perhaps suggesting that Chinese exporters and FX moves may be absorbing some of the upward impact of tariffs. Import prices from Canada were up 0.7 percent m/m (9.5 percent y/y)”, stated Barclays in a research report.Upward pressures from increase oil prices continue to leave an imprint on the headline, and petroleum import prices were up 4.1 percent sequentially in September and imply that the boost from energy prices continues.

Within the non-petroleum category, price changes came in mixed. Food and industrial supplies prices rose solidly, while prices of capital goods, autos and consumer goods came in flat or dropped a bit.

At 14:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at -40.7663. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex