U.S. Import Prices Unexpectedly Decrease In July As Fuel Prices Plummet

(RTTNews) - The Labor Department released a report on Tuesday showing an unexpected decline in import prices in the U.S. in the month of July.

The report said import prices fell by 0.4 in July following a revised 0.3 percent decrease in June. Economists had expected import prices to inch up by 0.1 percent compared to the 0.3 percent increase originally reported for the previous month.

The Labor Department also said the annual rate of import price growth slowed to 5.9 percent in July from 7.1 percent in June.

The unexpected monthly decrease in imports prices came amid an extended nosedive in prices for fuel imports, which plummeted by 7.2 percent in July after plunging by 3.8 percent in June.

Meanwhile, the report said prices for non-fuel imports rose by 0.4 percent in July after inching up by 0.1 percent in June.

The Labor Department said higher prices for capital goods, foods, feeds, and beverages and automotive vehicles, parts, and engines more than offset lower prices for non-fuel industrial supplies and materials.

"While the decline in monthly prices kept the annual gain at a sizeable 5.9%, the outlook for import prices is one of moderation," said Matthew Martin, Senior U.S. Economist at Oxford Economics.

He added, "Energy prices will likely be volatile until a durable peace is found between the US and Iran, but we expect them to remain around their current $80/barrel mark."

The report also said export prices tumbled by 1.3 percent in July after falling by a revised 0.7 percent in June.

Export prices were expected to come in unchanged compared to the 0.6 percent decrease originally reported for the previous month.

The Labor Department also said the annual rate of export price growth slowed to 8.2 percent in July from 10.2 percent in June.

The steep monthly drop in export prices came as prices for non-agricultural exports slumped by 1.5 percent, more than offsetting a 1.0 percent jump in prices for agricultural exports.