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Saturday, January 22, 2022
HomeNewsEconomyImport Prices At Lowest Since April, Exports Unexpectedly Fall

Import Prices At Lowest Since April, Exports Unexpectedly Fall

CREDIT: Reuters

Friday the Commerce Department reported U.S. import prices saw the biggest drop since April, falling 0.7 percent in October. Economists were expecting prices to fall by just 0.4 percent. Meanwhile, Export prices fell 0.5 percent, while economists expected prices to actually rise slightly by 0.1 percent.

For U.S. exports prices to unexpectedly fall in October, is a trouble sign of global economic weakness, and the cost of imports in to the United States dropping was due to a steep drop in the price of oil.

The drop in export prices last month is the seventh decline in 8 straight months. Analysts polled by Reuters had expected a slight increase in export prices and also missed the mark on import prices.

The decline shows European consumption is so weak that American producers have no option to raise prices.

The European Central Bank, which is struggling to support a recovery, cut interest rates earlier this month in part over concerns the region’s weak economy is weighing too much on prices.

A 3.6 percent fall in petroleum imports, the steepest decline in over a year, caused the drop in overall prices. However, there were signs that global economic weakness was also a reason for price declines.

Import prices for Japanese goods dropped 0.2 percent last month, which is an indication that Japan’s monetary policy was putting downward pressure on its exchange rate, thus its exports were becoming more competitive globally.

In what some are seeing as a possible indicator of Japanese competitiveness, auto import prices fell 0.1 percent, and had been down 1.4 percent during the year up until this October reading. The 12-month decline is the biggest drop since the Labor Department began tracking it in 1981.

Written by
Staff Writing Group

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