Import Prices Firm, Led by Fuel and Industrial Goods
The U.S. import price index increased by 0.4% in July, reversing two months of declines. Fuel import prices led the rise with a 2.7% monthly gain—petroleum up 2.4%, natural gas up 4.7%. Nonfuel import prices advanced 0.3%, reflecting higher costs for industrial supplies, consumer goods, and capital goods. Year-on-year, overall import prices were still down 0.2%, driven by a 12.1% drop in fuel prices. Meanwhile, export prices edged up just 0.1% on the month, with nonagricultural goods supporting the gain.
Export Gains Slow as External Demand Levels Off
Export prices rose only slightly in July, up 0.1%, after a 0.5% rise in June. Agricultural exports were flat on the month, while nonagricultural goods—particularly automotive and capital goods—provided some lift. Year-over-year, export prices increased 2.2%, driven by firming prices in industrial and manufactured goods. However, destination-based data shows declining prices to Japan and flat results for Mexico, suggesting uneven global demand.
Outlook: Cautiously Bullish, but Fed Path Remains Unclear
The combination of strong retail figures, a rebound in regional manufacturing, and firming import costs suggests continued economic resilience. However, with fuel prices rebounding and supply availability still tight, input costs could pressure margins. For traders, the short-term bias remains cautiously bullish, supported by improving business sentiment and stable consumer spending—but attention remains on the Federal Reserve’s inflation and rate response.
More Information in our Economic Calendar.