The Bureau of Labor Statistics released another one of its reports that was delayed due to the government shutdown: September’s import price index.
The big headline number for September? Overall, import prices — meaning the price that U.S. importers paid before tariffs, for goods including fuel, manufacturing equipment, alcoholic beverages, apparel, and so much more — were unchanged.
But the story gets more interesting once you look a little closer and start to factor in those import taxes, too.
Susan Fleck is assistant commissioner for international prices at the BLS. Her team knocks on doors and asks companies the prices they paid for imports. Then they bring in millions of prices from U.S. Customs and the Department of Commerce.
“When you add up which prices have changed for which product areas — and there’s addition and multiplication, I would say, and quite a bit of it, and some logarithms — then what you get at the very top level is that it appears there’s no change,” she said.
Until you look at the lower levels. If you take out fuel, for example, because fuel prices can be quite variable, the index went up.
Meagan Schoenberger, senior economist at KPMG, said she likes to look for categories where prices decreased.
“It insulates the both the importer in terms of their profit margins and the final consumer from price increases when import prices come down,” she said.
She noticed prices came down for computers, electronics, and European wine. But not in all categories.
“We do see that import prices fall, generally speaking, in response to tariffs. That hasn’t happened as much this time,” she said.
Decreases in some categories were offset with increases in others, including non-fuel industrial supplies and materials.
“U.S. importers of steel and aluminum and other metals from the European Union are actually paying more than what they were a few months ago,” said Jason Miller, a supply chain management professor at Michigan State University.
When you factor tariffs in, he said, “that means they’re paying a whole heck of a lot more for these products.”
Which puts manufacturers in a difficult spot.
“Do we not expand our production lines like we were thinking? Because machinery is more expensive? Do we maybe buy fewer tools than we were planning? Do we maybe buy more tools, but actually look at cutting our workforce?” he said.
Miller said he wonders if manufacturers will absorb any increased costs through lower margins or pass them along to their buyers.
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