Import costs of the U.S. were kept the same in July with the surge of fuel costs that balanced out weak prices on other aspects, implying keeping an eye to inflation due to a strong dollar.
The flat reading of import prices revised upwardly to 0.1 percent decline in June as reported by the Labor Department on Tuesday. A decline of import prices by 0.4 percent in June.
Reuters survey of economists is an increase of 0.1 percent in July. Twelve months after, import price grew to 4.8 percent, the highest gain since February 2012, following a rise of 4.7 percent in June.
In the previous month, imported fuels and lubricants rose by 1.6 percent from 1.3 percent increase in June. On the other hand, food costs decline by 1.8 percent from 2.6 drop in June. As for imports prices, excluding fuels and foods, it slid down by 0.1 percent in July after a drop of 0.2 percent last month. Core import prices grew by 1.6 percent in 1 year from July.
The dollar grew 0.5 percent compared to other main trading partners in July and further strengthen by 4 percent on a trade-weighted basis this year, which could affect the expected increase of import goods prices in the background of tension between global major economies and America.
Tariffs on steel and aluminum imposed by the Trump administration to protect the domestic business that was seen to be performing unevenly to the foreign competitors. Consequently, their major trading partners such as the E.U., China, Canada, and Mexico responded the same way with their tariffs.