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First Cut: Import Price Index down on energy and other non-fuel prices

The Import Price Index for January fell 0.5% from December, a third straight month of declines. The January decline was due to both fuel and non-fuel import costs. While petroleum prices were little changed (-0.1%) there were sharp drops in natural gas (-44.2%) and coals and coal gas (-39.0%). Excluding petroleum, the index was down 0.7%, while excluding fuels the index was down 0.2%.


Prices were down 0.3% for foods, feeds, and beverage on a 0.6% decline in agricultural foods that was only partially offset by a 0.5% increase in nonagricultural foods. Prices for industrial supplies were down 1.7%, and off 3.3% excluding petroleum.

For finished imported goods prices, capital goods were up 0.1%, automotive vehicles were down 0.2%, and consumer goods excluding autos were down 0.3%.

Fed policymakers will find little overall evidence of upward price pressures related to import for the economy, but they will keep an eye on the fact that much of the present readings are due to the energy component which has previously been characterized as a “special”, “temporary”, or “transitory” factor for monetary policy.

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