U.S. import prices rises below expectations in December

Import prices in the U.S. surprised to the downside in December, coming in lower than the consensus expectations. Import prices rose a modest 0.1 percent sequentially, as compared with consensus projection of 0.4 percent. The data for November was revised upwardly, where growth in headline import prices and prices excluding energy were upwardly revised a tenth each. Imported petroleum prices rose just 2 percent sequentially, and failed to give much of a boost to the headline measure, noted Barclays in a research report.

Among other categories, food prices continued to weigh on the headline figure for the third consecutive month, whereas industrial supplies recorded modest growth. Outside of these categories, import prices were greatly flat. Consequently, import prices excluding petroleum dropped two-tenths on the month.

Total import prices, on a year-on-year basis, rose 3 percent in December, a slowdown from 3.3 percent from the prior month. Excluding fuels, import prices rose 1.3 percent, as compared with November’s growth of 1.4 percent. Meanwhile, imported inflation from industrialized nations remained stable, while it recorded a marginal fall with respect to other trading partners. However, in all, imported price pressures appear to be holding up well. Moreover, the move in the nominal effective exchange rate also remains supportive.

“Taken together, it suggests that this category of prices is likely to support consumer goods inflation in the coming months”, added Barclays.

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