US import prices fall; year-on-year drop largest since 2016 - Recent News from USA
US import prices fall; year-on-year drop largest since 2016

US import prices fall; year-on-year drop largest since 2016

Shutdown casting shadow

But an ongoing partial shutdown of the federal government, which has delayed the release of data from the Bureau of Economic Analysis and Census Bureau, is making it hard to get a good read on the economy and could complicate policy decisions.

The government partially shut on Dec. 22 amid demands by President Donald Trump that the U.S. Congress give him $5.7 billion this year to help build a wall on the country’s border with Mexico. The longest government shutdown in history has delayed the release of December retail sales and November business inventory data, which were scheduled for Wednesday.

The publication of November construction spending and trade figures has also been delayed, and the December housing starts and building permits report due on Thursday is likely to be postponed. Economists estimate the shutdown is cutting at least two-tenths of a percentage point from quarterly gross domestic product growth every week.

Last month, prices for imported fuels and lubricants fell 9.2 percent after tumbling 13.3 percent in November. Prices for imported petroleum declined 11.6 percent after decreasing 16.0 percent in November.

Imported food prices edged up 0.1 percent in December after dropping 2.2 percent in the prior month. There were decreases in the cost of capital goods, but prices for motor vehicles and consumer goods eked out small gains.

Excluding fuels and food, import prices were unchanged last month after slipping 0.1 percent in November. The so-called core import prices rose 0.6 percent in the 12 months through December. Core import price readings are being held down by the strong dollar, which gained about 7.5 percent last year against the currencies of the United States’ main trade partners.

The cost of goods imported from China was unchanged last month. Prices for imported Chinese goods fell 0.2 percent in 2018 and have not increased on a calendar year basis since 2011.

The report also showed export prices fell 0.6 percent in December after declining 0.8 percent in November. A 3.9 percent rise in prices of agricultural exports was offset by a 1.1 percent drop in prices of nonagricultural goods, which have a larger weighting.

December’s increase in agricultural goods prices was the biggest since August 2012 and reflected gains in soybeans and nuts. Export prices increased 1.1 percent on a year-on-year basis in December after rising 1.8 percent in November. They increased 1.1 percent in 2018.

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