Imports Continuing to Become Expensive for Americans
Import prices are continuing to go up as both fuel and non-fuel imports become increasingly expensive for Americans.
According to the latest data by the U.S. Department of Commerce, import prices shot up 0.7% in September, posting their largest monthly increase since June 2016. On the trailing 12-month basis, import prices have gone up by 2.7% in a year.
Despite the U.S. dollar beginning to gain some strength after continually dropping in the first half of this year, the record increase in U.S. import prices this month is once again disappointing.
Both fuel and non-fuel import categories posted an increase in prices in September. The increase in price of imported fuel was recorded at 3.9% through the month, which is the second-largest monthly increase in prices we’ve seen this year.
Petrol led the gains in fuel prices as petroleum prices shot up by 4.5% in September. On a year-over-year basis, petroleum prices have gone up by a whopping 20.1%. Meanwhile, the overall price index for imported fuel has gone up by 18.2% between September 2016 and September 2017.
On a geographical basis, the rise in petroleum prices was particularly obvious in imports from Canada and Mexico. Overall, prices of imports from Canada went up by 0.5%, while those from Mexico were up 1.4%.
It’s interesting that import prices have recorded significant increases from the two countries with whom President Trump is planning to end America’s trade agreements. The future of the North American Free Trade Agreement (NAFTA), under which America trades with the two neighbors, has now become uncertain under the Trump presidency. That’s because the President blames the U.S.’ neighbors for trading on unfavorable terms and stealing American jobs.
Regardless, the prices of imports from other regions, including the European Union and Japan, also went up in September.
In addition to fuel prices, the price index for non-fuel imports also posted an increase in September. The prices of imports other than fuel edged up 0.3% during the month.
Nearly every import–including food, feed and beverages; capital goods; industrial goods; and automotives–continued to become expensive through September.
Food, feed, and beverage import prices jumped 1.8% in September, posting their largest increase since July last year. Industrial supplies and materials saw a price hike of 2.4% in the month. Likewise, both the capital goods and automotives import categories respectively recorded a 0.1% gain in their price indexes.
While export prices also recorded an increase in the month, the dollar’s substantial decline through the first half of the year is continuing to put pressure on the nation’s exchequer.
“U.S. Import and Export Price Indexes-September,” U.S. Bureau of Labor Statistics, October 17, 2017.