US import prices post biggest gain since 2012

[WASHINGTON] US import prices increased by the most in nearly nine years in January, lifted by higher prices for energy products and a weak dollar, supporting expectations for an acceleration in inflation in the coming months.

The Labor Department said on Thursday import prices jumped 1.4 per cent last month, the biggest gain since March 2012, after increasing 1.0 per cent in December.

Economists polled by Reuters had forecast import prices, which exclude tariffs, gaining 1.0 per cent in January. In the 12 months through January, import prices rebounded 0.9 per cent after slipping 0.3per cent in December. That was the biggest year-on-year gain since October 2018 and followed 11 straight monthly declines.

Inflation is being closely watched amid concerns from some quarters that President Joe Biden's proposed US$1.9 trillion Covid-19 recovery plan could cause the economy to overheat. But inflation is likely to be driven by the labour market, which is experiencing considering slack.

The government last week reported a moderate increase in consumer prices in January. Producer prices recorded their largest increase since 2009 in January, in part reflecting bottlenecks in the supply chain caused by the coronavirus pandemic.

Imported fuel prices increased 7.4 per cent last month after soaring 8.1 per cent in December. Imported food prices surged 2.1 per cent.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Excluding fuels and foods, import prices accelerated 0.8 per cent after gaining 0.4 per cent in December. The rise in the so-called core import prices reflected the dollar's 2.7 per cent drop last year against the currencies of the United States' main trade partners.

Last month, the cost of goods imported from China rose 0.3 per cent for a second straight month. Prices for imported capital goods gained 0.2 per cent. The cost of imported motor vehicles rose 0.2 per cent.

Prices for consumer goods excluding autos dipped 0.1 per cent.

The report also showed export prices surged 2.5 per cent in January, the largest rise since the index was first published on a monthly basis in December 1988, after increasing 1.3 per cent in December. Prices for agricultural exports rose 6.0 per cent, while nonagricultural exports increased 2.2 per cent.

Export prices increased 2.3 per cent on a year-on-year basis in January, the largest gain October 2018, after rising 0.4 per cent in December.

REUTERS