WASHINGTON, Sept 15 — US import prices increased more than expected in August and gains in the prior month were revised sharply higher, supporting the view that inflation pressures were building up.
The report from the Labor Department today followed data last week showing further increases in both consumer and producer prices in August. Firming inflation, however, is unlikely to discourage the Federal Reserve from injecting more money into the economy to aid the recovery from the Covid-19 recession amid considerable labour market slack.
The US central bank in August rewrote its framework, putting new emphasis on the labor market and less on worries about too-high inflation.
Import prices rose 0.9 per cent last month as the costs of goods increased broadly. Data for July was revised higher to show import prices accelerating 1.2 per cent instead of gaining 0.7 per cent as previously reported. Economists polled by Reuters had forecast import prices, which exclude tariffs, would increase 0.5 per cent in August.
In the 12 months through August, import prices fell 1.4 per cent after declining 2.8 per cent in July.
Last month, prices for imported fuels and lubricants rose 3.3 per cent after advancing 15.1 per cent in the prior month. Petroleum prices gained 2.9 per cent after increasing 16.5 per cent in July. Imported food prices rebounded 0.4 per cent last month after dropping 0.9 per cent in July.
Excluding fuels and food, import prices accelerated 0.7 per cent last month after gaining 0.3 per cent in July. The so-called core import prices shot up 0.9 per cent in the 12 months through August.
Further gains are likely, with the dollar weakening in recent weeks against the currencies of the United States’ major trading partners.
US financial markets were little moved by the data.
The cost of goods imported from China was unchanged in August after rising 0.2 per cent in the previous month. Prices fell 0.3 per cent on a year-on-year basis in August.
Last month, prices for imported capital goods edged up 0.1 per cent. The cost of imported motor vehicles ticked up 0.1 per cent. Prices for consumer goods excluding autos rose 0.2 per cent.
The report also showed export prices increased 0.5 per cent in August as rising prices for nonagricultural products offset declining prices for agricultural goods. That followed a 0.9 per cent gain in July. Export prices declined 2.8 per cent on a year-on-year basis in August after dropping 3.8 per cent in July. — Reuters