US import prices rebound in April, but trend remains weak

US IMPORT prices increased in April for the first time since late 2022 amid higher fuel costs, but imported inflation pressures remained subdued.

Import prices rose 0.4 per cent last month after dropping 0.8 per cent in March, the Labor Department said on Friday (May 12). Last month’s increase was the first since December 2022.

Economists polled by Reuters had forecast import prices, which exclude tariffs, would increase 0.3 per cent. Import prices in the 12 months through April fell 4.8 per cent, matching the decline in March. Import prices have now dropped for three straight months on a year-on-year basis.

The government reported this week that the annual increases in consumer and producer prices in April were the smallest in more than two years, bolstering expectations the Federal Reserve would pause its interest rate increases at a meeting next month.

The US central bank has raised its benchmark overnight interest rate by 500 basis points to the 5.00 per cent-5.25 per cent range since March 2022 and last week signalled it could pause its fastest monetary policy tightening campaign since the 1980s.

Imported fuel prices surged 4.5 per cent after dropping 3.9 per cent in March. They were driven by a 5.7 per cent jump in petroleum prices, which offset a 17.4 per cent tumble in natural gas prices. The cost of imported food rose 0.2 per cent.

Excluding fuel and food, import prices were unchanged. These core import prices dropped 0.5 per cent in March. The dollar has weakened against the currencies of the United States’ main trade partners, which is likely preventing further declines in core import prices.

The cost of imported capital goods slipped 0.1 per cent for a second straight month. Imported motor vehicle and parts prices were unchanged. The cost of consumer goods excluding motor vehicles rebounded 0.2 per cent after falling 0.3 per cent in March.

Prices for imports from China fell 0.3 per cent, extending their decline this year. They were weighed down by cheaper computer and peripheral equipment manufacturing. Prices for Chinese imports were down 1.9 per cent on a year-on-year basis.

SEE ALSO

US trade deficit falls in March on rise in exports

Imports from Japan, Canada, Mexico and the European Union cost more in April.

The report also showed export prices gained 0.2 per cent in April after decreasing 0.6 per cent in March. Prices for agricultural exports rose 0.4 per cent as higher prices for corn, nuts, meat and vegetables offset lower fruit and soybean prices.

Nonagricultural export prices climbed 0.2 per cent, lifted by industrial supplies and materials as well as capital and consumer goods.

Export prices dropped 5.9 per cent on a year-on-year basis in April, the largest decline since May 2020, after decreasing 5.2 per cent in March. REUTERS