Import Prices Fall in June

Wells Fargo Research Team Wells Fargo

Import prices declined 0.4 percent in June after strong gains in May and April. All major categories of imports posted price declines on the month, with particular weakness in petroleum, food and consumer goods.

Lower Headline and Core Import Prices

Import prices fell 0.4 percent in June, after an otherwise strong week for inflation, with solid growth for producer and consumer prices. Lower oil prices and a stronger dollar contributed to weakness. Ex-fuels, import prices declined o.3 percent.
The effect of import prices (mostly goods) on consumer prices is limited by the fact that consumers spend most of their money on services. Overall, inflation remains on a firming trend.

Weakness in Consumer Goods Prices

Prices for every category of finished goods fell. Weakness was pronounced in consumer goods ex-autos, which fell 0.3 percent for the largest one-month drop since November 2016.
Import prices do not include tariffs, as these are applied after. Steel and iron import prices declined 0.3 percent in June, which should help ease the impact of 25 percent tariffs imposed on steel this spring. However, prices are up strongly on the year.

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Wells Fargo Research Team

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