U.S. Import Prices Fall 0.4% as Fuel Costs Drop Sharply

U.S. import prices fell 0.4% in July, extending a revised 0.3% decline in June as a sharp drop in fuel costs outweighed higher prices for a broad range of nonfuel goods, the Bureau of Labor Statistics said Tuesday. The July decrease was the largest monthly drop in the overall import price index since May 2025.

The monthly retreat did not erase the much stronger price gains seen over the past year. Import prices were still 5.9% higher than in July 2025. U.S. export prices also moved lower in July, falling 1.3% after a revised 0.7% decline in June, while remaining 8.2% higher over the previous 12 months.

Fuel prices reverse part of the spring surge

Fuel was the main force pulling the import index lower. According to the BLS release, prices for imported fuels fell 7.2% in July after dropping 3.8% in June. That followed a 12.1% jump in May, showing how sharply energy prices have swung from month to month this year.

The decline was concentrated in petroleum and petroleum products, where import prices fell 7.5%. Natural gas moved in the opposite direction, with import prices rising 5.3%. Even after July’s decline, imported fuel prices were 25.2% above their level a year earlier. Petroleum and petroleum-product prices were up 26.3% over the year, while natural-gas import prices were 74.3% higher.

That annual comparison matters because the headline monthly decline could otherwise suggest a broader easing in the cost of foreign goods than the data show. The July fuel drop reduced the overall index, but the price level for imported energy remained substantially above where it stood a year earlier.

The latest monthly move also followed unusually large increases earlier in the spring. Fuel import prices rose 10.2% in March, 18.9% in April and 12.1% in May, before turning lower in June and July. The July decline was the largest one-month drop in fuel import prices since September 2024, when the index also fell 7.2%.

Nonfuel import prices continued to rise

Outside energy, import prices moved higher. The index for nonfuel imports increased 0.4% in July and was up 4.5% from a year earlier, the largest 12-month increase since June 2022. That divergence between falling fuel prices and rising nonfuel prices is one of the most important details in the report because it shows that July’s 0.4% decline in the headline index was not broad based.

Import prices for foods, feeds and beverages rose 0.9% during the month. Higher prices for fruit, food oils and oilseeds, and other animal and vegetable preparations outweighed declines in categories including green coffee and sugar.

Among industrial inputs, nonfuel industrial supplies and materials declined 0.5%. BLS said lower prices for major nonferrous metals and finished metal shapes more than offset increases in finished nonmetal products.

Prices for major finished-goods categories were mostly higher. Capital-goods import prices increased 0.9%, driven by categories including computers, peripherals and semiconductors, industrial and service machinery, and civilian aircraft, engines and parts. Prices for imported automotive vehicles, parts and engines rose 0.2%, while consumer goods excluding autos were unchanged.

The country-level data were also mixed. Import prices from China rose 0.8% in July, the largest monthly increase in that index since July 2008, and were 2.7% higher than a year earlier. Prices of imports from Japan increased 0.6%. Import prices from the European Union fell 0.2%, those from Mexico declined 0.3%, and prices for imports from Canada dropped 2.1%, their first monthly decline since September 2025.

For readers following trade policy, there is an important limitation in how to interpret the figures. BLS says its import price indexes exclude import duties, including tariffs. The indexes measure changes in underlying transaction prices rather than the full tax-inclusive cost ultimately paid after duties are added. Tariffs can still influence the prices negotiated between buyers and sellers, but the duty itself is not part of the index.

The series is also not seasonally adjusted. BLS says import prices are based on U.S.-dollar prices paid by U.S. importers, with merchandise price data coming from both its survey program and government administrative trade records. The agency uses the indexes to help deflate trade statistics, and the data are also used in analysis of inflation, exchange rates and international competitiveness.

Export prices fell more sharply

The export side of the report showed a larger monthly decline. U.S. export prices fell 1.3% in July, following a 0.7% decrease in June. The weakness came from nonagricultural exports, whose prices dropped 1.5%, while agricultural export prices rose 1.0%.

Prices for nonagricultural industrial supplies and materials fell 4.1% in July, with lower prices for fuel, nonferrous metals and chemicals driving the decline. That drop more than offset increases in several finished-goods categories.

Capital-goods export prices rose 0.5% for the third consecutive month of gains. Export prices for consumer goods excluding autos increased 0.2%, while automotive vehicles, parts and engines rose 0.7%, the largest monthly increase for that category since April 2025.

Despite the July pullback, export prices remained well above year-earlier levels. Overall export prices were up 8.2% from July 2025, with nonagricultural export prices up 8.5% and agricultural export prices up 5.7%.

The BLS locality data showed different price movements across trading partners. Export prices to China fell 0.5% in July, while prices for exports to Japan rose 0.2%. Export prices to the European Union declined 1.9%, while prices for exports to Mexico and Canada increased 0.3% and 2.2%, respectively.

The next U.S. Import and Export Price Indexes report, covering August, is scheduled for September 16 at 8:30 a.m. Eastern Time.