Prices of Imported Goods Rise Slightly Over Two-Month Period
For the second month in a row, the cost of importing goods rose in September by .2 percent. This follows a rise in August of .2 percent, which was revised after an originally projected flat month. These numbers, released by the Labor Department on Wednesday, Oct. 23Â were delayed due to the recent government shutdown. Though the cost of petroleum imports are up, there is no sign of inflation driving up the cost of imported goods across the board. During the one-year period leading up to September, overall import prices had fallen by 1 percent. When the cost of importing petroleum is removed from the equation, import prices remained flat for August. Compared to the cost of importing petroleum in September 2012, prices have fallen one percent, which is the largest decline since 2009.
As the Federal reserve evaluates the lack of inflation for imports, along with weak global demand for U.S. export products, they should decide to continue Treasury bond purchases at the same rate heading into the first quarter of 2014. This bond buying project is designed to help keep inflation down.
The cost of importing petroleum was up in September by .8 percent, following the 1.9 percent rise in August. The cost of importing foods rose .5 percent, following a .3 percent gain in August. The cost of importing capital goods remained flat, as did automotive imports. Overall, automotive prices are 1.2 percent below the level of one year ago. This marks the largest year over year decline in automotive prices since record keeping of this metric began in 1981.
Import and export prices are a small, yet tell-tale sign of the strength of the global economy. Though there are signs of improvement, recovery is slow and was seriously hindered by the government shutdown that kept many government offices and agencies closed until last Wednesday, Oct. 16.
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