The price of U.S. imports in September barely declined, and oil prices rebounded. The impact of a weaker global economy had market-watchers worried about a steeper, 0.5 percent drop in imports, but the market’s effects were significantly more moderate.
Import prices fell 0.1 percent in September—allowing many to breathe a small sigh of relief. The smaller than expected decline may, “help lay the groundwork for an eventual interest rate hike by the Federal Reserve.” Imported oil prices rose 1.1 percent and non-oil import prices declined by a small 0.2 percent. The September decline was, “half the pace of declines registered in July and August.”
In previous statements, the Federal Reserve Chief Janet Yellen, “has argued that import prices have been a major factor keeping inflation well below the Fed’s 2 percent target.” Additionally, “the surge in value of the U.S. dollar, which has been fueled by expectations a strengthening U.S. economy would lead to higher interest rates, has been a factor decreasing the price of non-oil import prices.”
The Fed decided to delay a rate hike in September because the weakened global economy raised doubts about inflation meeting target numbers. By the time the Fed’s decision day approached, many economists sincerely (and correctly) doubted that a rate hike would happen that soon.
In response to the global economy and Fed decision, many market analysts anticipated a 0.5 percent decline in import prices for September. Additionally, while the import numbers were better than expected, export prices did fall 0.7 percent—more than the 0.2 percent economists originally forecasted.
As the global economy continues to shift and the next rate hike decision meeting gradually approaches, investors have numerous options available to them. By making smart financial decisions, market-watchers can prepare for fluctuations and volatility while still growing their portfolio and wealth. Speaking to a financial advisor can help you develop your financial plan, think about your portfolio in innovative new ways, and create new opportunities for success. The Fed cited economic uncertainty as their reason for delaying a Federal rate hike, and that uncertainty can have a huge impact on more than just policy. Make sure your financial plan is sound—and you’re getting the most out of your money—by talking to an expert at Apex Financial Advisors today.