September Sees Largest Drop in US Import Price, Signaling Lower Prices Ahead for Shoppers

The decline in import prices is driven by reduced costs of energy and food, indicating potential savings for consumers.

By Thea Felicity

Oct 16 2024, 10:54 AM EDT

US-ECONOMY-RETAIL — Half-loaves of bread priced for under $5 are displayed for sale inside a Whole Foods Market grocery store on August 26, 2024 in El Segundo, California. PATRICK T. FALLON/AFP via Getty Images

Despite the fear of increasing consumer price index, US import prices faced their most significant decline for the first time in nine months.

For September, the decline in US import prices can be attributed to falling costs of energy products and food.

Specifically, Reuters reported that the prices dropped by 0.4%, with the largest recorded in December of last year. The drop follows the 0.2% decline in August, per the Labor Department's Bureau of Labor Statistics. Economists were expecting the drop to fall to 0.4%.

Over the year leading up to September, US import prices have declined by 0.1% overall. This downward trend is seen as a positive sign for domestic inflation estimates.

How US Import Price Affects Purchases

According to VCPost, the consumer price index in September increased slightly despite inflation's lowest rate. At the same time—while producer prices remained steady, some components displayed strength. This suggests a higher monthly reading in key inflation measures monitored by the Federal Reserve, which has been expecting a 2% inflation target.

The US economy is resilient, but the central bank will likely reduce interest rates again next month. VCPost shared that the former cut was 50 basis points, but this time, it will be a small margin of 25 basis points.

With the Fed interest rate cut to stabilize inflation and declining US import prices, shoppers can expect reduced food and energy products costs, which retailers can pass on to consumers with lower grocery bills. This decrease can help ease some financial pressures on American households that are still struggling with finances, which LiveNOW from Fox reported earlier this year.