WASHINGTON: US import prices increased less than expected in July, a sign that inflation pressures may have peaked as supply chain bottlenecks that have impacted the US economy start to wane.
Import prices rose 0.3% last month after jumping 1.1% in June, the Labor Department said on Friday. The ninth straight monthly gain left the year-on-year increase at 10.2% compared to 11.3% the prior month but it was the lowest monthly increase since November last year. Economists polled by Reuters had forecast import prices, which exclude tariffs, increasing 0.6%.
The government reported earlier this week that consumer prices moderated in July even as they remained at a 13-year high on an annual basis, while producer prices posted their largest annual increase in more than a decade.
Rising COVID-19 vaccinations, low interest rates and nearly $6 trillion in government aid since the beginning of the pandemic are fueling demand at the same time as higher commodity costs, low inventories and a global shipping container crisis are straining the supply chain.
Imported fuel prices advanced 2.9% last month after rising 5.5% in June. Petroleum prices gained 2.1%, while the cost of imported food increased 0.3%. Excluding fuel and food, import prices edged down 0.1%. These so-called core import prices rose 0.6% in June. The report also showed export prices advancing 1.3% in July after increasing 1.2% in June. Prices for agricultural exports fell 1.7%. Nonagricultural export prices gained 1.6%.
Export prices increased 17.2% year-on-year in July after surging a 16.9% in June.