Import prices in July rose 1.1% on top of a like gain one month earlier, the increase quite a bit stronger than Consensus expectations for a 0.6% rise.

Petroleum prices jumped 6.6% and in early August Brent crude rose another 8%. Yesterday Brent crude was $65.64/bbl. versus an average $57.52 in July.

Import prices other than petroleum fell for the third consecutive month, off 0.1% last month. Prices for nonauto consumer goods fell 0.2% (+1.2% y/y) and capital goods prices fell 0.7% (-0.5% y/y). Excluding computers capital goods prices were unchanged (2.5% y/y).

During the last ten years there has been a 66% (negative) correlation between the nominal trade-weighted exchange value of the US dollar vs. major currencies and the y/y change in non oil import prices. The correlation is a lower 47% against a broader basket of currencies and a lower 57% against the real value of the dollar.

Export prices rose 0.1%. Agricultural prices fell 0.2% (-1.9% y/y) and nonagricultural prices rose 0.2% (3.2% y/y).