WASHINGTON (Reuters) - U.S. import prices unexpectedly rose in July, but the underlying trend continued to be weak, pointing to subdued imported inflation pressures.
The report from the Labor Department on Wednesday suggested inflation could remain moderate despite a broad increase in consumer prices in July, which could allow the Federal Reserve to cut interest rate further to limit the economic damage from the U.S.-China trade war.
President Donald Trump on Tuesday said a 10% tariff due to be imposed on thousands of Chinese imports, including technology products, clothing and footwear, on Sept. 1 would be delayed until Dec. 15.
But analysts said the move did nothing to ease concerns about the economy, which were amplified on Wednesday by the inversion of a key part of the U.S. Treasury yield curve, historically a reliable indicator of a coming recession.
The Fed lowered its short-term interest rate by 25 basis points last month for the first time since 2008 citing trade tensions and slowing global growth. Financial markets have fully priced in another quarter-point cut at the U.S. central bank’s Sept. 17-18 policy meeting.
“The U.S. inflation data have come in a little hot in July, but this won’t deter the Fed from cutting interest rates in September,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “We don’t view the decision (to delay tariffs) as a de-escalation in the trade tensions between the U.S. and China.”
Import prices increased 0.2% last month as a rebound in the cost of petroleum products offset declines in prices for capital goods and motor vehicles, the government said. Import
