Import prices decline and add to picture of waning U.S. inflation
By Jeffry Bartash
Import-price index falls for second time in four months
The numbers: The cost of imported goods fell in August, the latest in a series of tame inflation readings that have primed the Federal Reserve to cut interest rates next week.
The import-price index dropped 0.3% last month. Economists polled by the Wall Street Journal had forecast a 0.2% decline.
Lower gasoline prices were largely responsible for the negative print. Yet even if energy is excluded, import prices fell 0.1% last month, the government said.
Other major inflation barometers on consumer and wholesale prices have also shown costs are rising more slowly.
Key details: The cost of imports has risen a low 0.8% in the 12 months that ended in August. It has climbed 1.3% excluding fuel.
Big picture: The Fed is expected to reduce interest rates sharply over the next year, with the first cut expected next week.
Inflation has slowed toward low prepandemic levels and no longer appears to be a big threat to the economy.
The Fed jacked up rates in 2022 and 2023 to a 23-year high to combat the worst bout of inflation in four decades.
Looking ahead: "The August report is yet another signal to the Fed that inflation pressures are abating and supports the Fed beginning a series of rate cuts beginning in September," said Matthew Martin, U.S. economist at Oxford Economics.
Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to open higher in Friday trading.
-Jeffry Bartash
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
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09-13-24 0913ET
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