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Import Prices Up Three Months in a Row

Import Prices Up Three Months in a Row

April 12, 2024
Fuel prices put an end to headline import price deflation in March says Oxford Economics.

Prices for U.S. imports advanced 0.4% in March following a 0.3% rise the previous month, the U.S. Bureau of Labor Statistics reported on April 12.

This marked the third consecutive month increase, advancing 1.4% over the first quarter of 2024. The quarterly increase was the largest 3-month rise since the index rose 3.9% from February to May 2022.

Higher prices for fuel and nonfuel imports contributed to the overall increase. U.S. export prices rose 0.3% in March, after advancing 0.7% in February.

Prices for U.S. imports advanced 0.4% for the year ended in March, the first 12-month increase since January 2023. 

"As expected, higher fuel prices were the largest culprst of the third consecutive gain in import prices," says Matthew Martin, US Economist for Oxford Economics. " Encouragingly, though, nonfuel import prices were only marginally higher in March and signal that supply disruptions are not feeding through to wider price increases. 

"After rising 0.6% month-over-month in January, nonfuel prices have risen just 0.2% over the last two months. However, the strong gains in fuel prices mean headline annual prices rose for the first time since last January. 

The producer and import price reports for March provided a modest counterbalance to another stronger-than-anticipated gain in the CPI earlier in the week. Still, the Fed will clearly put more weight in its preferred measure of prices, PCE, and will need confidence disinflation in the pipeline before beginning its rate-cutting campaign. Import prices will benefit from the recent rally in the dollar, though higher oil prices will likely dominate the index again next month. 

Here are the highlights from the report. 

Fuel Imports: The price index for import fuel rose 4.7% in March, after increasing 1.3% the previous month. The March advance was the largest 1-month rise since the index increased 6.4% in September 2023.

Higher petroleum prices in March more than offset lower natural gas prices. Prices for import fuel rose 4.8% over the past year, the first 12-month advance since January 2023. Prices for import petroleum increased 6% in March, the largest monthly advance since September 2023. 

Petroleum prices rose 7.5% for the year ended in March, the largest 12-month increase since the index last advanced on a 12-month basis in December 2022. In contrast, import natural gas prices declined 31.9% in March following a 14.3% drop in February. The March decrease was the largest monthly decline since February 2023. Prices for natural gas fell 50.3 % over the past year.   

All Imports Excluding Fuel: Prices for nonfuel imports ticked up 0.1% in March following a 0.2% advance in February. Nonfuel import prices last recorded a monthly decline in October 2023. Higher prices for foods, feeds, and beverages; nonfuel industrial supplies and materials; and automotive vehicles in March more than offset lower prices for consumer goods and capital goods. Prices for nonfuel  imports were unchanged for the year ended in March.    

Finished Goods: Prices for each of the major finished goods import categories were mixed in March.  Consumer goods prices declined 0.3 percent following a 0.4% increase in February. Prices for capital goods fell 0.3% in March, the largest 1-month decrease since November 2019. The March drop was driven by a 3.5% decline in electric apparatus and parts not elsewhere specified. In contrast,  automotive vehicles prices rose 0.2% in March, after advancing 0.1% the previous month.     

Foods, Feeds, and Beverages: Foods, feeds, and beverages prices rose 1.6% in March, the largest 1- month advance since July 2023. Higher prices for vegetables, meat, and bakery and confectionary products in March more than offset lower fruit prices.     

Nonfuel Industrial Supplies and Materials: The price index for nonfuel industrial supplies and materials increased 0.6 percent in March, after decreasing 0.5% the previous month. The March advance was the largest monthly rise since December 2022. Higher prices for both finished and unfinished metals more than offset lower chemicals prices. 

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