US import prices declined less than expected in November

Total US import prices declined 0.4% m/m in November, much less than both forecast and consensus expectations (-0.8%). Nonpetroleum import prices fell 0.3% m/m (Figure 1). The y/y rate of decline for total import prices moderated to -9.4% relative to a downwardly revised 10.75 fall in October. The y/y change in nonpetroleum prices remained at -3.4%. All major subcategories of import prices fell on the month, with the exception of consumer goods, which were flat.

 Capital goods prices fell 0.1%, industrial supplies prices fell 1.5%, and the price of foods and beverages declined 0.5% m/m. Prices of imported autos and parts declined 0.1% m/m, bringing the y/y change to 1.8%. Export prices also declined, falling 0.6% m/m and 6.3% y/y.

"We expect import prices to decline further over the medium term as the effects of past dollar appreciation continue to weigh on prices",says Barclays.

Import prices from industrialized and emerging market countries fell at similar y/y rates through November. Ongoing economic weakness in many emerging markets combined with the recent further declines in commodity prices is likely to keep import prices from emerging markets declining for some time.

"We expect further declines in import prices and the subsequent pass-through to consumer prices, which is the major driver of soft consumer price inflation forecast for next year", added Barclays.