Import prices drop, but are expected to pick up over the next year
Import prices fell 0.3% in September, a slightly larger decline than forecasts. Both nonpetroleum and nonfuel import prices rose 0.3% in September. Over the last year, nonpetroleum import prices have risen by 2.9% (unchanged from August), while nonfuel import prices have posted a 2.6% increase on the same basis (versus 2.7% in the prior month).
Although year-over-year import price increases continued to decelerate in September, import prices will likey start to pick up for several reasons.
- The dollar has fallen sharply since September in anticipation of further quantitative easing in November.
- Oil prices have been picking up (WTI is now close to $83 per barrel versus $77 a month ago).
- Food price inflation continues to gain ground in the grains market (for example, corn is now at $583 per bushel versus $483 a month ago).