August Import Prices Muted, Oil and Food Remain Inflationary Risks

Another reading on inflation from the Labor Department is out this morning. The economic release may seem like a footnote after the bailout news in Europe, but the report is viewed frequently by those who look for inflation. Wednesday's report on import and export prices for the month of August showed that import prices were up by only +0.7%. The pick-up here was the first in several months and was due mostly to a 4.1% gain in petroleum imports.

Bloomberg was calling for +0.5% on export prices and was looking for a 1.5% gain in import prices. Dow Jones was calling for a 1.5% gain in import prices.

Food costs actually managed to decline. July import prices were revised to -0.7% from the initial and preliminary report of being down by some -0.6%.

It is interesting to see this news because oil has been ticking higher and gas-hungry SUVs now may cost over $100 per visit to the gas pump. Will this drive inflation higher? What about all those warnings about rising food prices locally due to drought conditions impacting supplies and feed stocks?

Today's news is good on the surface because the inflationary pressure looks better than expected. The question is whether it can last.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Consumer Product, Economy