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First Cut: March Import Price Index fell sharply due to fuel costs

The Import Price Index for March was down 2.3%  from February as prices for fuels plunged 26.8%. Excluding fuels, prices were down 0.1%, in part on a 1.0% fall in prices for foods, feeds, and beverages.  Prices of industrial supplies excluding fuels were up 0.4% as prices for selected building materials rose 2.3% and unfinished metals related to durables were up 1.2%.

Compared to a year-ago, import prices were down 4.1% overall and down 3.5% excluding fuels. There is no upward price pressure overall from imports of goods.

Imported goods are comparatively cheaper due to a firming in the US dollar in March from February. However, fuel prices are in dollars, so no affected by exchange rates. Prices for finished goods were up 0.4% for autos and parts and probably due to scarcity along supply chains, while capital goods were up only 0.1% while business investment remains weak in the US. Prices for consumer goods excluding autos were down 0.3%, in part on a drop-off in demand while US shoppers withdrew during widespread layoffs and uncertain incomes.

The 9.8% decline in prices for air passenger services in part reflected the steep dip in fuels prices, but also competition for what few travelers are flying. Air freight services were up 2.6%, likely due to increases in on line shopping which is keeping goods moving, if not people.

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