Cheaper Energy Products Depress US Import Prices in September

• U.S. import prices fell by the most in nine months in September amid a sharp decrease in the cost of energy products, pointing to a benign inflation outlook that keeps the Federal Reserve on course to continue cutting interest rates.
• The report from the Labour Department on Wednesday also showed import prices, excluding fuel, barely rising over the past three months. The report followed data last week showing slightly firmer consumer prices in September.
• While producer prices were unchanged last month, some components showed strength, which was expected to translate into higher monthly readings in the key inflation measures tracked by the U.S. central bank for its 2% target.
• "Import prices do not feed through directly to producer and consumer prices but are a signal inflationary pressures remain muted and adds some support to another rate cut in November," said Matthew Martin, a senior U.S. economist at Oxford Economics. "In tandem with falling prices at China's factory gates, import price gains will be modest."
• Import prices slipped 0.4% last month, the biggest drop since December 2023, after a revised 0.2% decrease in August, the Labor Department's Bureau of Labour Statistics said. Import prices were previously reported to have declined 0.3% in August. The drop in import prices, which exclude tariffs, was in line with economists' expectations.

(Source: Reuters)