Import prices rose by 0.9 percent in July, pushed higher by a spike in oil prices.The Labor Department said Friday the 4.7 percent surge in petroleum prices more than offset a 0.1 percent decline in nonpetroleum prices. Export prices rose by 0.4 percent, on the heels of a 0.7 percent increase in June. Economists had expected import prices to rise by 1.0 percent. Having left interest rates unchanged for the first time in about two years earlier this week, the Federal Reserve is likely comfortable with the July rate of increase in import prices, particularly when factoring out energy prices. The small decrease in nonpetroleum prices was led by a downturn in the price index for nonpetroleum industrial supplies and materials, which fell 0.9 percent following increases of 2.8 percent and 1.3 percent, respectively, in May and June.
The drop in nonpetroleum industrial supplies and materials prices was driven by a turnaround in unfinished metal prices, the Labor Department said, although lower prices for natural gas and building materials also contributed to the July decline.
Higher chemicals and finished metal prices offset some of the decline in nonpetroleum industrial supplies and materials. A 0.1 percent decrease in consumer goods prices also contributed to lower July prices for nonpetroleum imports. Consumer goods prices were unchanged over the past 12 months.
In contrast, the price indexes for automotive vehicles, capital goods, and foods, feeds, and beverages all rose in July. Automotive vehicle prices increased 0.2 percent for the second consecutive month, and advanced 0.7 percent for the year ended in July. Capital goods prices and prices for foods, feeds, and beverages each ticked up 0.1 percent for the month. The increase in capital goods prices followed a 0.3 percent rise in June, but despite those increases, the index declined 0.4 percent over the past year. Prices for foods, feeds, and beverages rose 3.9 percent for the July 2005-2006 period.