U.S. import prices post third straight monthly decline in September

U.S. import prices dropped for a third straight month in September, pulled down by falling costs for petroleum products and a strong dollar, suggesting that imported inflation pressures were subsiding as global supply chains improve.

Import prices decreased 1.2% last month after declining 1.1% in August, the Labor Department said on Friday. In the 12 months through September, import prices increased 6.0%, the smallest rise since February 2021, after advancing 7.8% in August.

Economists poll had forecast import prices, which exclude tariffs, falling 1.1% month-on-month.

Government data this week showed consumer and producer prices increasing more than expected in September, which cemented expectations for a fourth straight 75-basis point interest rate hike from the Federal Reserve next month.

Falling import prices also suggested an easing of bottlenecks in the global supply chain, which was reflected in unchanged readings in underlying consumer and producer goods prices in September.

Imported fuel prices dropped 7.5% last month after decreasing by the same margin in August. Petroleum prices also fell 7.5%, while the cost of imported food rebounded 0.2%.

But oil prices have likely bottomed following last week’s decision by the Organization of the Petroleum Exporting Countries and allies to cut crude production.

Excluding fuel and food, import prices fell 0.5%. These so-called core import prices dipped 0.1% in August. They increased 3.3% on a year-on-year basis in September. Dollar strength is helping to limit the increase in core import prices.

The dollar has gained 10.5% against the currencies of the United States’ main trade partners since January.

The report also showed export prices dropped 0.8% in September after plunging 1.7% in August.

Prices for agricultural exports decreased 1.0%, pulled down by lower prices for soybeans, fruit, meat and nuts. Nonagricultural export prices declined 0.9%. Export prices increased 9.5% year-on-year in September, the smallest rise since February 2021, after advancing 10.7% in August.