October 11, 2019 / 12:43 PM / 10 days ago

U.S. import prices rise modestly, non-oil prices drop

WASHINGTON, (Reuters) - U.S. import prices rose modestly in September and were lower for goods excluding oil, suggesting that imported inflation could remain subdued.

The Labor Department said on Friday import prices increased 0.2% last month. Economists polled by Reuters had forecast import prices would be unchanged during the month.

Data for August was revised to show import prices dropping 0.2% instead of the 0.5% decline previously reported.

September’s increase in prices was driven by higher petroleum costs, which rose 2.3%. Outside of petroleum, import prices were 0.1% lower.

In the 12 months through September, import prices decreased 1.6%.

That suggests inflation will likely remain moderate. Data published on Thursday showed U.S. consumer prices were unchanged in September and underlying inflation retreated, supporting expectations the U.S. Federal Reserve will cut interest rates in October for the third time this year amid risks to the economy from trade tensions.

The Fed cut rates in July for the first time since 2008.

Import prices exclude tariffs. Excluding fuels and food, import prices were unchanged last month. Core import prices decreased 1.1% in the 12 months through September.

The report also showed export prices fell 0.2% in September. Export prices dropped 1.6% on a year-on-year basis.

Reporting by Jason Lange Editing by Paul Simao

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