What's Behind The Increase In Import, Export Prices In July?
U.S. import prices increased 0.7% in July, while the price index for U.S. exports advanced 0.8%, the Bureau of Labor Statistics said Thursday.
What Happened: U.S. import prices increased for the third straight month and jumped 2.8% from April to July.
Much of this increase is being driven by rising fuel prices. Import fuel prices experienced a 6.9% increase in July and posted increases in May and June as well.
The price index for nonfuel imports increased 0.2% during July, driven in part by higher prices for industrial supplies and materials and consumer goods.
The export price index increase was driven by higher prices for nonagricultural exports and agricultural exports.
Why It’s Important: Despite increases in consecutive months, U.S. import prices have declined 3.3% over the last year. Import fuel prices have fallen 32.8% over the last 12 months.
Consumer prices have risen for imports including medical, dental and pharmaceutical materials.
Import prices from China rose 0.2% during July, while export prices to China rose 1.2%.
Import prices to other trading partners including Canada, Mexico, Japan and the European Union all experienced price increases in July.
What’s Next: Rising import prices have been passed on to the consumer.
July’s Consumer Price Index increased 0.6%, which means that costs are being passed onto the U.S. consumer market.
With the coronavirus-fueled economic downturn, price increases do not favor the consumer.
Import and export price index data for August is scheduled for release on Tuesday, Sept. 15.
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