US import prices increase; post largest annual gain in more than four years
WASHINGTON: US import prices increased more than expected in September, boosted by higher costs for energy products and a range of other goods, further evidence of rising inflation pressures as the Middle East conflict persists. The report from the Labour Department on Friday followed data this week showing strong increases in consumer and producer prices last month, which left economists…
In September, US import prices surged more than analysts anticipated, driven by elevated costs for energy products and various other goods, signaling heightened inflationary pressures amid the ongoing tensions in the Middle East. The Labor Department's report revealed that import prices surged 1.1 percent last month, after a downward revision from 0.5 percent in August.
Economists had anticipated a 0.8 percent increase, following a 0.7 percent gain in August. The 12-month increase in import prices reached 8.1 percent, the highest since July 2022, after expanding 6.7 percent in August. Despite the uptick in September, financial markets anticipated the Federal Reserve to hold off on rate hikes this month and await a decision in December.
The central bank had already raised its benchmark interest rate by 25 basis points to a range of 3.75 percent-4.00 percent in September. Fuel imports rose 4.8 percent last month, after slipping 0.2 percent in August. Food prices remained flat, after declining 0.6 percent in August. Core import prices, excluding food and fuels, climbed 0.7 percent, matching the previous month's gain.
Capital goods prices rose 0.9 percent, fueled by computer, peripheral, and semiconductor costs, while industrial and service machinery costs surged, offsetting a dip in scientific and medical machinery prices. Import prices for consumer goods, excluding automobiles, increased 0.4 percent, propelled by a 0.7 percent jump in the cost of durable goods.
Imported vehicles, parts, and engines saw a 0.3 percent rise. Chinese imports saw a 0.7 percent increase, marking the highest since December 2021. Import air passenger fares also jumped 12.6 percent, potentially affecting inflation measures used by the Federal Reserve. Economists' estimates for core PCE inflation in September ranged from 0.31 percent to 0.36 percent, potentially rounding up to 0.4 percent, indicating a year-over-year increase of 3.1 percent.
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