US import prices rebound in April, but trend remains weak

WASHINGTON (Reuters) – U.S. 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% last month after dropping 0.8% in March, the Labor Department said on Friday. 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%. Import prices in the 12 months through April fell 4.8%, 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 U.S. central bank has raised its benchmark overnight interest rate by 500 basis points to the 5.00%-5.25% range since March 2022 and last week signaled it could pause its fastest monetary policy tightening campaign since the 1980s.

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

Excluding fuel and food, import prices were unchanged. These so-called core import prices dropped 0.5% 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% for a second straight month. Imported motor vehicle and parts prices were unchanged. The cost of consumer goods excluding motor vehicles rebounded 0.2% after falling 0.3% in March.

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

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

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

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

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

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