US import prices unexpectedly rise in July despite subdued fuel costs

Import prices in the United States rose unexpectedly during the month of July despite subdued energy and fuel costs, signaling that a firmer inflation scenario may be on the cards in the near future.

US import prices inched higher by 0.1 percent in July, after climbing an upwardly revised 0.6 percent in June, data released by the Labor Department showed Thursday. On the contrary, Import prices had been expected to drop by 0.4 percent compared to the 0.2 percent increase that had been reported for the previous month.

The unexpected uptick in import prices came as prices for non-fuel imports rose by 0.3 percent in July after falling by 0.2 percent in June. The increase in non-fuel prices was led by higher prices for non-fuel industrial supplies and materials and foods, feeds, and beverages.

Further, the report said prices for fuel imports slumped by 2.5 percent in July after jumping by 9.6 percent in June. A 3.6 percent drop in petroleum prices drove the downturn in fuel prices, more than offsetting a 31.4 percent spike in the price index for natural gas.

The Labor Department also said export prices rose by 0.2 percent in July after advancing by 0.8 percent in the previous month. Prices for non-agricultural exports climbed 0.3 percent in July following a 0.5 percent increase in June, reflecting higher prices for non-agricultural industrial supplies and materials as well as consumer goods.

On the other hand, the report said prices for agricultural exports fell by 0.4 percent in July after surging up by 2.6 percent in June. The downturn was led by an 8.5 percent drop in corn prices. Meanwhile, compared to the same month a year ago, import prices were down by 3.7 percent in June, while export prices were down by 3.0 percent.