U.S. overall import prices recover in November

U.S. overall import prices recovered in November after the sharp fall in the previous month. They were stimulated by a solid monthly rise in industrial supplies and materials. Nevertheless, the remainder of the report was not as solid with prices of capital goods and foods both declining.

Autos and consumer goods excluding autos reported very weak price pressures, even if they did not outright fall. Stripping fuels, prices dropped 0.1 percent sequentially, and 1.4 percent year-on-year, illustrating the underlying soft trend in imported inflation over the past year.

Delving into details, the volatility induced by energy and food prices, imported inflation has seen softness for some time now with core prices in deflation. Apart from petroleum, all other major import price components are falling on an annual basis.

The decline in prices of durable capital goods is likely related to the softness in the global manufacturing cycle, noted Barclays in a research report. On the consumer side, the inflation trend softened considerably for large household and recreational goods at the beginning of 2019, but prices appear to have stabilized around flat in more recent months.

Imported inflation from China continued to be negative. Prices from Mexico fell for the sixth straight month, while import price pressures from Canada bounced back after a soft October.