WASHINGTON: The price of imports rose in February for the third month in a row, and in a potentially worrisome sign, the increase spread beyond oil into other industrial and consumer goods. The import price index rose 0.2% in February following even bigger increases in the prior two months, the government reported Thursday. Rising import inflation could be another spur for the Federal Reserve to raise interest rates soon, perhaps as early as next week. Unlike in January and December, the increase in import-related inflation last month wasn’t tied mainly to higher oil prices. Indeed, the cost of petroleum imports actually fell 0.7% in February. Instead, the increase in import prices last month was mostly due to higher costs of industrial supplies and materials as well consumer goods such as food and clothing.
Import prices minus fuel jumped 0.3% last month, marking the biggest advance since last summer. Over the past year, import prices have climbed 4.6%, registering the biggest 12-month gain since early 2012. The recent uptick in the cost of foreign goods ends almost 2½ years of basically negative import inflation tied to lower oil prices. If February is the harbinger of more widespread import inflation, the Fed could be moved to raise interest rates more aggressively. That would increase the cost of borrowing for businesses and consumers for a variety of products such as mortgages and autos. By and large, the cost of imports outside of energy have remained muted until very recently. They have risen just 0.5% in the past 12 months. That could change if the U.S. or global economies speed up, though. The price of goods exported by the U.S. to other nations, meanwhile, rose by 0.3% in February. Over the past year, export prices have climbed 3.1%.
