The July increase in U.S. import prices resulted from higher consumer goods costs which indicates potential inflationary effects from tariffs. The Labor Department announced that prices increased by 0.4% during July following a 0.1% decrease in June. The economic community predicted no change in prices.
The price gains indicate foreign exporters have not reduced their prices to compensate for U.S. tariffs. The annual price decrease reached 0.2% in July which showed a smaller drop than June’s 0.5% decline.
The July data showed fuel import prices increased by 2.7% while food import prices decreased by 0.1%. The price index without food and fuels showed a 0.3% increase. The prices of consumer goods excluding autos rose 0.4% while capital goods prices increased 0.1%.
The combination of rising producer prices with the recent increase in consumer inflation suggests that future consumer price growth will remain strong despite the dollar’s 6.7% annual decline. The tariff pass-through effects have been limited yet they continue to move in a positive direction according to an analyst.
