Import Prices Rise in January, Boosted by Energy Products

Carlo Allegri/Reuters

U.S. import prices rose in January more than expected amid further gains in the cost of energy products, but a strong dollar continued to dampen underlying imported inflation.

The Labor Department said on Feb. 10 import prices increased 0.4% last month after an upwardly revised 0.5% rise in December. In the 12 months through January, import prices jumped 3.7%, the largest gain since February 2012, after advancing 2.0% in December.

Economists polled by Reuters had forecast import prices gaining 0.2% last month after a previously reported 0.4% increase in December.

The dollar extended gains against the euro on the data, while prices for U.S. government debt fell.

Import prices are rising as firming global demand lifts prices for oil and other commodities, but the spillover to a broader increase in inflation is being limited by dollar strength.

The dollar gained 4.4% against the currencies of the United States' main trading partners in 2016, with most of the appreciation occurring in last months of the year.

This suggests that the greenback will continue to depress imported inflation in the near-term even though the dollar has weakened 2.9% on a trade-weighted basis this year.

Prices for imported fuels increased 5.8% last month after rising 6.6% in December. Import prices excluding fuels fell 0.2% after a 0.1% dip the prior month. The cost of imported food dropped 1.3% after declining 1.5% in December.

Prices for imported capital goods edged down 0.1% after being unchanged in December. The cost of imported automobiles dropped 0.5%, the biggest decline since January 2015.

Imported consumer goods prices excluding automobiles fell 0.1% last month after sliding 0.2% in December.

The report also showed export prices ticking up 0.1% in January after increasing 0.4% in December.

Export prices were up 2.3% from a year ago. That was the biggest increase since January 2012 and followed a 1.3% advance in December.

Prices for agricultural exports dipped 0.1% last month as falling prices for soybeans offset higher prices for corn. Agricultural export prices fell 0.2% in December.

Prices for industrial supplies and materials exports rose for a second straight month in January.