• U.S. import prices remain unchanged in July

    Source: FxWire Pro - Commentary / 14 Aug 2018 15:08:43   America/New_York

    Import prices in the U.S. remained the same in July on the heels of an upwardly revised 0.1 percent sequential rise in the prior month. The flat reading was consistent with the consensus expectations. Meanwhile, the headline import prices rose 4.8 percent on a year-on-year basis, reflecting a 43.6 percent year-on-year rise in the petroleum component.

    Stripping petroleum, import prices dropped 0.1 percent sequentially, widely consistent with the projection and slightly below the consensus, stated Barclays in a research report. The change in the headline print for June was marked up considerably from -0.4 percent to -0.1 percent, reflecting the upward revisions in the petroleum category. Up to now, there has been little evidence that the tariffs imposed by the U.S. on Chinese goods in June are exerting an upward pressure on domestic prices, as the price index for U.S. imports from China drop 0.2 percent sequentially in July after June’s flat reading.

    ‘We continue to view the main message from import prices as an ongoing divergence of energy and consumer import prices that is likely to continue to play out for the rest of the year”, stated Barclays.

    Upward pressures from increasing oil prices continue to impact the headline, with petroleum import prices rising 0.9 percent sequentially in July after June’s upwardly revised 1.4 percent sequential rise. All told, petroleum prices rose 43.6 percent on a year-on-year basis. Price changes within the non-petroleum category came in mixed.

    The small overall fall in non-petroleum import prices was mostly seen in foods and beverages, which fell 1.8 percent sequentially on the heels of an even larger 2.6 percent sequential fall in June. With these recent falls, food and beverage import prices dropped 3.8 percent year-on-year. Capital goods prices also dropped 0.1 percent for the third straight month, but were still up slightly on a year-on-year basis.

    Declines in these categories were mostly countered by consumer goods prices, which rose 0.3 percent in July and by industrial supplies, which rose 0.2 percent in July. The index for industrial supplies rose 20.9 percent year-on-year, possibly reflecting large rises in the immediate aftermath of the tariffs imposed on steel and aluminum imports in March, said Barclays.

    At 18:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bullish at 78.866. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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