US DATA: Ex-Oil Import Price Inflation Returns To More Typical Pace In Q3

Headline import price inflation was softer than expected in September but our preferred ex-petroleum metric was on balance stronger and showed a return of continuation of more typical increases in Q3 after tariff-driven concessions in 1H25. 

• Import prices inflation was softer than expected at 0.0% M/M (cons 0.1) in the shutdown-delayed September report. It also saw a downward revised 0.1% M/M in Aug vs an initial 0.3% but this was offset by upward revisions to Jul and Jun.
• More importantly, import prices ex petroleum increased a slightly stronger than expected 0.2% M/M (cons 0.1) after an unrevised 0.2% in Aug and upward revised 0.1% in Jul.
• It sees a return of somewhat more typical ex-oil import price inflation in Q3 after softer run rates in 1H25 were seen as foreign producers/exporters took some of the tariff burden (a reminder than import price data doesn’t include tariffs). Specifically, 1H25 saw average import price inflation of 0.0% M/M after 0.2% M/M through 2024.
• Annual ex-oil import price inflation held within recent ranges meanwhile, at 0.8% Y/Y having been between 0.7-0.9% since June at its softest since May 2024.
• The country-level data for key trading partners, which are generally on an all import price basis, reveal mixed latest trends along with some sizeable downward revisions specifically to August.
• In particular, import prices from China increased 0.8% M/M in September, a strong rise albeit after a large downward revision to 0.1% M/M in Aug vs the 0.6% initially reported. Bearing in mind the scope for similarly sized revisions ahead, it currently shows a marked uptick from the -0.5% M/M averaged through Jan-Jul. For context, Chinese import price inflation averaged -0.1% M/M in 2024.
• Elsewhere, Canada saw the other more notable development, with manufactured import prices -0.6% M/M (to avoid the impacts from a large decline in oil prices) for their weakest since March on the initial escalation in US-Canada trade tensions. The data are volatile however.
• In trend terms, China import prices are -2.6% Y/Y, EU 0.1% Y/Y, Canada manufactured -0.2% Y/Y and Mexico manufactured 2.3% Y/Y.