U.S. Import Prices Jump More Than Expected Amid Rebound In Fuel Prices
Reflecting a substantial rebound in prices for fuel imports, the Labor Department released a report on Wednesday showing U.S. import prices increased by much more than expected in the month of January.
The Labor Department said import prices surged up by 2.0 percent in January after falling by a revised 0.4 percent in December. The spike in import prices reflected the biggest monthly increase since April of 2011.
Economists had expected import prices to jump by 1.0 percent compared to the 0.2 percent dip originally reported for the previous month.
The bigger than expected rebound in import prices came as prices for fuel imports soared by 9.3 percent in January after plunging by 8.3 percent in December.
Prices for non-fuel imports still showed a notable increase, however, shooting up by 1.4 percent in January after rising by 0.5 percent in December.
Higher prices for non-fuel industrial supplies and materials, foods, feeds, and beverages, capital goods, consumer goods, and automotive vehicles all contributed to the surge in non-fuel import prices, which represented the biggest increase since monthly percent changes were first published in January 2002.
The Labor Department also said the annual rate of growth in import prices accelerated to 10.8 percent in January from 10.2 percent in December.
“The blistering increase in fuel costs means import price inflation is unlikely to slow materially until the second half of the year,” said Mahir Rasheed, U.S. Economist at Oxford Economics.
He added, “We expect the gradual slowdown in import prices to be underpinned by a combination of cooling goods demand as the weather warms, healthier supply dynamics, and tighter monetary policy as the FOMC commences rate lift off next month.”
The report showed export prices also spiked by 2.9 percent in January after tumbling by a revised 1.6 percent in December.
Export prices were expected to advance by 1.3 percent compared to the 1.8 percent slump originally reported for the previous month.
Prices for agricultural exports soared by 3.0 percent in January after rising by 0.7 percent in December, while prices for non-agricultural exports jumped by 2.9 percent following a 1.9 percent slump in the previous month.
Compared to the same month a year ago, export prices were up by 15.1 percent in January versus the 14.7 percent surge in December.
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