The 2.3% rise in import prices last month more than doubled Consensus expectations for a 1.0% increase. Surprising was a 1.2% gain in nonpetroleum prices that was a record for any one month.

Petroleum prices also were strong and the 7.3% increase came after a downwardly revised 6.0% August increase.

The strength in import prices other than petroleum reflected a 5.0% (11.3% y/y) pop in non-oil industrial supplies. Broad based strength was evident in a 2.6% (12.6% y/y) gain in chemical prices and a 2.9% (12.0% y/y) increase in nonferrous metals. Prices for nonauto consumer goods rose 0.3% (1.4% y/y) following two months of decline and capital goods prices were unchanged for the second month (-0.3% y/y). Computer, peripheral & semiconductor prices fell 0.4% (-5.9% y/y). Excluding computers capital goods prices rose 0.3% (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 jumped 0.9% as nonagricultural prices surged 1.1% (3.8% y/y).

Exchange Rate Pass-Through to Import Prices in the Euro Area from the Federal Reserve Bank of New York can be found here.