With a continued surge in prices for fuel imports partly offset by a decrease in prices for non-fuel imports, the Labor Department released a report on Friday showing U.S. import prices crept up by much less than expected in the month of June.
The Labor Department said import prices inched up by 0.2 percent in June after climbing by a downwardly revised 0.5 percent in May.
Economists had expected import prices to advance by 0.7 percent compared to the 0.6 percent increase originally reported for the previous month.
The uptick in import prices reflected a continued spike in prices for fuel imports, which surged by 5.7 percent in June after soaring by 6.5 percent in May.
Meanwhile, prices for non-fuel imports declined for the second straight month, falling by 0.5 percent in June after dipping by 0.3 percent in May.
The continued decrease in prices for non-fuel imports came as lower prices for non-fuel industrial supplies and materials, consumer goods, and foods, feeds, and beverages more than offset higher prices for capital goods.
Compared to the same month a year ago, import prices were up by 10.7 percent in June after skyrocketing by 11.7 percent in May.
“Ongoing volatility in energy prices will likely dictate the path ahead for import prices,” said Mahir Rasheed, U.S. Economist at Oxford Economics. “However, with growth concerns rising and energy prices potentially showing signs of relief, we expect import prices to moderate further in the second half of the year.”
He added, “Cooling consumer demand will also play a part to slow import price growth, as households pull back on spending while also continuing to rotate consumption away from relatively more expensive goods towards services.
The Labor Department also said export prices rose by 0.7 percent in June after surging by an upwardly revised 2.9 percent in May.
Export prices were expected to jump by 2.0 percent compared to the 2.8 percent spike originally reported for the previous month.
The much smaller than expected increase in export prices came as a 0.9 percent advance in prices for non-agricultural exports was partly offset by a 0.3 percent dip in prices for agricultural exports.
The report showed the annual rate of growth in export prices slowed to 18.2 percent in June from 18.9 percent in the previous month.
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