U.S. Import, Export Prices Pull Back Much More Than Expected In October

(RTTNews) - Import and export prices in the U.S. both fell by much more than expected in the month of October, according to a report released by the Labor Department on Thursday.

The Labor Department said its import price index slid by 0.8 percent in October after climbing by an upwardly revised 0.4 percent in September.

Economists had expected import prices to decrease by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.

Prices for fuel imports led the way lower, plunging by 6.3 percent in October after surging by 6.3 percent in September.

Lower prices for both petroleum and natural gas contributed to the sharp pullback in fuel prices, which reflected the steepest drop since September 2022.

Excluding prices for fuel imports, import prices dipped by 0.2 percent for the third consecutive month in October.

Lower prices for non-fuel industrial supplies and materials, capital goods, foods, feeds, and beverages and consumer goods more than offset higher prices for automotive vehicles.

The report said import prices in October were down by 2.0 percent compared to the same month a year ago following a 1.5 percent year-over-year slump in September.

"As expected, the retreat in oil prices in October helped push headline import prices lower for the first time in three months, while nonfuel prices continued on a downward path and fell for the fifth consecutive month," said Matthew Martin, U.S. Economist at Oxford Economics.

He added, "Lower import prices will support declines in producer and consumer goods prices, adding weight to the Fed's plans to remain on pause through year-end and much of 2024 as officials ensure inflation is thoroughly on its way toward the central bank's target."

Meanwhile, the Labor Department said export prices tumbled by 1.1 percent in October after climbing by a downwardly revised 0.5 percent in September.

Export prices were expected to decline by 0.5 percent compared to the 0.7 percent increase originally reported for the previous month.

The pullback in export prices reflected steep drops in prices for both agricultural and non-agricultural exports, which slumped by 1.1 percent and 1.0 percent, respectively.

Compared to the same month a year ago, export prices were down by 4.9 percent in October after plunging by 4.1 percent in September.