Reflecting a substantial rebound in prices for fuel imports, the Labor Department released a report on Wednesday showing U.S. import prices increased by much more than expected in the month of January.<\/p>\n
The Labor Department said import prices surged up by 2.0 percent in January after falling by a revised 0.4 percent in December. The spike in import prices reflected the biggest monthly increase since April of 2011.<\/p>\n
Economists had expected import prices to jump by 1.0 percent compared to the 0.2 percent dip originally reported for the previous month.<\/p>\n
The bigger than expected rebound in import prices came as prices for fuel imports soared by 9.3 percent in January after plunging by 8.3 percent in December.<\/p>\n
Prices for non-fuel imports still showed a notable increase, however, shooting up by 1.4 percent in January after rising by 0.5 percent in December.<\/p>\n
Higher prices for non-fuel industrial supplies and materials, foods, feeds, and beverages, capital goods, consumer goods, and automotive vehicles all contributed to the surge in non-fuel import prices, which represented the biggest increase since monthly percent changes were first published in January 2002.<\/p>\n
The Labor Department also said the annual rate of growth in import prices accelerated to 10.8 percent in January from 10.2 percent in December.<\/p>\n
“The blistering increase in fuel costs means import price inflation is unlikely to slow materially until the second half of the year,” said Mahir Rasheed, U.S. Economist at Oxford Economics.<\/p>\n
He added, “We expect the gradual slowdown in import prices to be underpinned by a combination of cooling goods demand as the weather warms, healthier supply dynamics, and tighter monetary policy as the FOMC commences rate lift off next month.”<\/p>\n
The report showed export prices also spiked by 2.9 percent in January after tumbling by a revised 1.6 percent in December.<\/p>\n
Export prices were expected to advance by 1.3 percent compared to the 1.8 percent slump originally reported for the previous month.<\/p>\n
Prices for agricultural exports soared by 3.0 percent in January after rising by 0.7 percent in December, while prices for non-agricultural exports jumped by 2.9 percent following a 1.9 percent slump in the previous month.<\/p>\n
Compared to the same month a year ago, export prices were up by 15.1 percent in January versus the 14.7 percent surge in December. <\/p>\n