The U.S. Bureau of Labor Statistics announced on September 16 that import prices rose by 0.7% month-on-month in August, reversing the continuous decline of 0.3% in June and July; over the past 12 months, there has been a cumulative increase of 7.0%, which is the largest year-on-year increase since August 2022. Export prices also rose by 0.6% month-on-month, after a decrease of 1.4% in July; the year-on-year increase reached 8.6%. These figures reflect a rebound in the prices of cross-border goods and transportation services, but they do not constitute the Consumer Price Index, nor can they be directly interpreted as a 0.7% increase in the cost of living for American residents for that month.
The import price index measures the prices of goods and certain services entering the United States, while the export index measures the prices at which the U.S. sells to overseas markets. These indices can capture changes in exchange rates, energy costs, raw materials, transportation, and global supply and demand, and are often used to observe corporate costs and terms of trade. Whether these price changes are ultimately passed on to the retail end also depends on factors such as inventory levels, contracts, profit margins, and market competition.
Rebound driven by non-fuel imports; significant divergence in source countries and transportation prices observed
The increase in import prices in August was not driven by fuels. Officials pointed out that the rise in non-fuel imports outweighed the impact of falling fuel prices. A decline in energy prices usually reduces transportation and production costs, but increases in prices for electronic products, capital goods, consumer goods, or other industrial inputs can still subject companies to broader external pressures. If companies cannot absorb these costs through efficiency or profits, they may gradually be reflected in wholesale and consumer prices later on.
There are significant differences in data from various sources. Import prices from China increased by 1.0% month-on-month, representing the largest single-month increase since the index was first released in 2004, and by 3.0% year-on-year; import prices from the European Union rose by 0.9%, Japan by 0.2%, and Mexico by 0.1%. Import prices from Canada decreased by 0.8%, continuing the downward trend of 2.3% seen in July. Regional indices are affected by the composition of goods and cannot be simply explained as a uniform increase in prices for all goods from a particular country.
The rise in prices in China is mainly driven by the manufacturing of computers and electronic products. For companies that rely on electronic components, equipment, and finished products, this may affect their procurement budgets; however, the index measures border prices and does not include domestic transportation costs, retail markups, and taxes in the United States. Companies may also lock in prices in advance or use existing inventory, so there is usually a time lag between changes at the import stage and those at the retail level.
Transport services have shown another form of differentiation. Import air passenger fares fell by 11.2% in August, and by 11.0% in July, yet they still increased by 13.2% year-on-year; import air freight prices rose by 1.8% month-on-month and by 27.0% year-on-year. Export air passenger fares decreased by 4.3%, while export air freight prices increased by 2.8%, with a year-on-year increase of 18.1%. The seasonality of passenger traffic and route discounts cannot reflect freight costs, and the impact of these factors on businesses and households may be opposite.
Official data allows for corrections over three consecutive months after release. Energy and transportation projects are subject to significant fluctuations, and a single-month increase of 0.7% cannot be automatically extrapolated to the whole year. A more cautious approach is to observe both the exclusion of fuel indicators and the cumulative changes over three months, as well as specific commodity categories, to determine whether price increases have spread from a few categories.
Export prices rose by 8.6% year-on-year, but terms of trade did not improve simultaneously for all partners.
U.S. export prices rose 0.6% month-on-month in August. Agricultural export prices increased by 0.5%, with no monthly decline since December 2025; increases in corn and animal feed prices offset declines in meat prices. Agricultural export prices rose 5.8% year-on-year, the largest year-on-year increase since December 2022, with corn, soybeans, oilseeds, edible oils, and feed being the main drivers of this rise.
Non-agricultural export prices rose by 0.7% month-on-month, following declines of 0.8% in June and 1.6% in July respectively. Prices of industrial goods rebounded by 1.4% driven by petroleum and petroleum products, non-ferrous metals, and other metals, while natural gas prices fell. Capital goods prices increased by 0.2%, and prices of automobiles and parts rose by 0.3%. Consumer goods prices, excluding automobiles, remained unchanged. This indicates that the recovery in the overall index is due to both factors related to commodities and changes in the prices of certain manufactured goods.
Rising export prices may increase the per-unit revenue of U.S. producers, but if overseas customer demand weakens as a result, the quantity effect will offset the price gains. Import and export prices also jointly determine the terms of trade, that is, how many imports can be obtained in exchange for one unit of exports. The U.S. terms of trade index with China declined by 2.1% in August, due to a 1.1% decrease in export prices to China and a 1.0% increase in import prices from China. The terms of trade with Canada and Mexico improved by 2.4% and 1.1%, respectively.
Trade terms are not the same as the trade balance. An improvement in the price ratio can come from higher export prices or lower import prices; real net exports also depend on quantity, exchange rates, and demand. For monetary policy, import costs are one of the indicators of inflation, but central banks will consider them along with CPI, PCE, wages, and inflation expectations. A single increase in border prices is not sufficient to determine interest rates on its own.
Enterprises should pay more attention to the items that correspond to their own supply chains. Air freight has increased by 27.0% year-on-year, which has a greater impact on high-value and time-sensitive goods; the decrease in prices from Canada may reflect changes in the energy and commodity mix; changes in the prices of electronic products affect the technology and manufacturing industries. Simply adding the 7.0% year-on-year increase in import prices to the selling price of each item would ignore the weight and transmission mechanisms.
The key signal from the August data is that external price pressures have once again spread to non-fuel imports and certain exports, as fuel prices decline. This could put pressure on corporate profit margins and inflation, but the speed of this transmission is not fixed. What remains to be seen is whether non-fuel imports will continue to rise, whether transportation costs will fall, and whether final demand will allow companies to raise prices, rather than just relying on a one-month overall index to declare a new round of inflation as certain.
