U.S. Import and Export Prices Decline in August 2024
In August 2024, U.S. import and export prices both recorded declines, signaling a potential cooling in global trade pressures. The U.S. Bureau of Labor Statistics reported a 0.3% drop in import prices and a sharper 0.7% decline in export prices. These moves followed modest price increases in previous months, indicating growing downward pressure on trade prices as we approach the final quarter of the year.
Import Prices: Fuel Leads Decline
U.S. import prices fell by 0.3% in August, marking the largest decline since December 2023. This reversal follows a period of slight gains in June and July. Over the past 12 months, import prices increased by 0.8%, with the last year-on-year decline seen in February 2024.
- Fuel Imports: Fuel prices drove the majority of the decline, falling 3% in August, led by a 3.2% drop in petroleum prices and a 3.7% decrease in natural gas prices. Fuel import prices decreased by 4.6% over the past year, highlighting a cooling energy market after earlier surges.
- Nonfuel Imports: Excluding fuel, import prices edged down 0.1%. Key categories such as nonfuel industrial supplies, consumer goods, and food contributed to the drop. Despite the monthly decline, nonfuel import prices were up 1.3% year-over-year.
Export Prices: Agricultural Weakness
Export prices took a notable hit, declining 0.7% in August after a 0.5% increase in July. This marks the first year-on-year drop (-0.7%) in export prices since April 2024.
- Agricultural Exports: Agricultural prices fell sharply by 2% in August, led by a significant 9.8% decrease in soybean prices. Other contributors to the decline included corn, wheat, and fruit. Over the past year, agricultural export prices dropped 6.9%.
- Nonagricultural Exports: Nonagricultural export prices declined by 0.6%, driven by a 1.1% decrease in nonagricultural industrial supplies and materials, particularly export fuel prices. The semiconductor sector also experienced pressure, with prices falling 3%.
Regional Impact and Services
Import and export price changes varied by region. Notably, imports from China decreased by 0.2%, continuing a trend of deflationary pressures from the region, while prices for exports to China fell 1.7%. On the services front, import air passenger fares fell sharply by 12.4%, led by a decline in European air travel costs.
Market Forecast: Bearish Outlook
The overall bearish trend in import and export prices suggests weakening global demand and softening energy markets. The decline in agricultural export prices may continue to pressure U.S. farm incomes, while lower fuel prices could ease inflation concerns. However, with weakening demand across major sectors and regions, traders should remain cautious about short-term trade performance, as continued price declines could signal a broader economic slowdown.
