WASHINGTON: Prices for imported goods rose in May for the first time in almost a year, a sign that a rebound in oil markets is slowly pushing up inflation pressures in the U.S.
Import prices increased 1.3% in May from a month earlier, the Labor Department said Thursday. That marked the first increase since June 2014 and the sharpest rise in more than three years.
Economists surveyed by The Wall Street Journal had expected import prices to rise 1% in May from April.
Despite last month’s rise, import prices are still weak historically. Over the past year, they are down 9.6%.
The persistent weakness in import prices—covering everything from lumber to machinery—reflects weak demand throughout the global economy.
It also shows how relative economic strength in the U.S., combined with money printing by global central banks to stimulate growth, have allowed the dollar to strengthen against other currencies. A stronger dollar effectively makes U.S. exports more expensive while making imports cheaper.
Last month’s move largely reflected oil prices. The price of imported petroleum rose 12.7% last month, the biggest increase since June 2009.
Crude prices fell sharply in the second half of last year and early this year, but they have rebounded this spring. Imported petroleum prices are still 40.6% lower from a year ago.
Outside of petroleum, import prices were flat. Prices for autos, natural gas, nonfuel industrial supplies and capital goods fell.
The price of U.S. exports rose 0.6%, the biggest jump since March 2014.
Other measures suggest inflation in the U.S. remains historically weak.
The Commerce Department’s personal consumption expenditures index—the Federal Reserve’s preferred measure of inflation—has undershot the central bank’s inflation goal of 2% for nearly three years. Overall prices were up just 0.1% in April from a year earlier. Prices outside of energy and food-so-called core prices-climbed 1.2%.
The Fed is counting on inflation to gradually rise to its goal—a signal of a stronger economy—as it studies when and how quickly to raise short-term interest rates, which have been pinned near zero since the recession. The central bank is set to hold a policy meeting next week. Many Wall Street analysts expect interest rates to rise later this year, perhaps as early as September.
