U.S. import prices fall further sequentially in April

U.S. import prices dropped 2.6 percent sequentially, while it fell 6.8 percent year-on-year in April. This is the third straight month the import prices fell. Total import prices dropped further in April and indicate towards continued imported deflation based on both the headline and core measures.

“We believe that the expected weakness in global demand, as well as the relative strength of the USD, will likely keep them subdued in the coming months. In turn, this puts downside pressure on the outlook for producer and consumer prices through the core goods channel”, said Barclays in a research report.

Imported energy prices dropped 33 percent sequentially, which mirrors the solid declines in both the CPI and PPI data for the same month. Food prices were quite soft, dropping 1.3 percent sequentially, similar to the move in producer prices. The food price falls in both the import and producer price reports go against the sharp rise in the CPI data and imply the source of that spike was not from imported and pipeline price pressures building up, added Barclays.