US import prices increase 0.5 per cent on jump in fuel

[WASHINGTON] US import prices jumped faster than expected in September amid resurgent energy prices but prices excluding fuels were unchanged.

The Labor Department said on Friday import prices rose 0.5 per cent last month. That was the largest increase since May and followed a revised 0.4 per cent decrease in August.

Import prices were previously reported to have fallen 0.6 per cent in August. Economists polled by Reuters had forecast import prices rising 0.2 per cent in September.

In the 12 months through September, import prices rose 3.5 per cent after a 3.8 per cent increase in the 12 months through August.

Last month, prices for imported fuels and lubricants rose 3.8 per cent, the largest increase since May, after falling 2.2 per cent in August. Food prices advanced 2 per cent in September after rising 0.3 per cent in the prior month.

Excluding fuels and food, import prices fell 0.1 per cent last month after slipping 0.2 per cent in August.

The so-called core import prices rose 1 per cent in the 12 months through August. The weakness in core import prices likely reflects ongoing dollar strength. The dollar has gained more than six per cent this year against the currencies of the United States' main trade partners.

Dollar strength is expected to offset some of an anticipated increase in prices as the Trump administration presses ahead with tariffs on nearly all Chinese imports.

US President Donald Trump imposed tariffs on nearly US$200 billion of Chinese imports last month and then threatened more levies if China retaliated. China then hit back with tariffs on about US$60 billion of U.S. imports.

On Thursday, Mr Trump warned there was much more he could do that would hurt China's economy.

The report also showed export prices were unchanged in September after declining 0.2 per cent in August. Prices for agricultural products fell 1.4 per cent last month.

Export prices rose 2.7 per cent on a year-on-year basis in September after rising 3.5 per cent in August.

REUTERS