US import prices unexpectedly rise in October

US IMPORT prices unexpectedly rose in October amid higher prices for fuels and other goods, the latest indication of lack of progress lowering inflation in recent months.

Import prices rebounded 0.3 per cent last month after an unrevised 0.4 per cent decline in September, the Labor Department’s Bureau of Labor Statistics said on Friday (Nov 15). Economists polled by Reuters had forecast import prices, which exclude tariffs, slipping 0.1 per cent. In the 12 months through October, import prices increased 0.8 per cent after dipping 0.1 per cent in September.

Imported fuel prices rose 1.5 per cent after two straight monthly declines. Food prices fell 1.6 per cent, declining for the third consecutive month. Excluding fuels and food, import prices gained 0.4 per cent after rising 0.3 per cent in September. The so-called core import prices increased 2.2 per cent year-on-year in October.

Government data week showed progress lowering inflation back to its 2 per cent target had essentially stalled. Consumer prices increased 0.2 per cent for a fourth straight month in October while producer prices picked up 0.2 per cent.

That together with tariffs on imported goods expected to be unveiled by President-elect Donald Trump’s incoming administration, led economists to believe that the Federal Reserve was unlikely to cut interest rates four times in 2025 as was projected by policymakers in September.

Though the US central bank is widely expected to deliver a third rate cut in December, some economists say that will be a close call. Fed Chair Jerome Powell said on Thursday that “the economy is not sending any signals that we need to be in a hurry to lower rates.”

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The Fed embarked on its policy easing cycle with an unusually large half-percentage-point rate cut in September, its first reduction in borrowing costs since 2020. It hiked rates by 525 basis points in 2022 and 2023 to tame inflation. REUTERS