WASHINGTON, May 16 (Reuters) - U.S. import prices rose by the most in two years in April amid rising costs for energy products and other goods, suggesting that domestic inflation could remain elevated for a while.
Import prices surged 0.9% last month, the largest increase since March 2022, after an upwardly revised 0.6% rise in March, the Labor Department's Bureau of Labor Statistics said on Thursday. Economists polled by Reuters had expected import prices, which exclude tariffs, to advance 0.3% following a previously reported 0.4% gain in March.
In the 12 months through April, import prices accelerated 1.1%, the largest gain since December 2022. Prices rose 0.4% in March, which was the first year-on-year increase since January 2023.
The firmer import price readings cast a shadow on the inflation outlook. Data on Wednesday showed inflation resuming its downward drift after surging in the first quarter, with consumer price growth moderating in April after posting solid gains for two straight months.
Subsiding price pressure together with easing labor market conditions have strengthened expectations that the Federal Reserve will start cutting interest rates in September.
The U.S. central bank has kept its policy rate in the 5.25%-5.50% range since July. It has raised its benchmark overnight interest rate by 525 basis points since March 2022.
Imported fuel prices increased 2.4% in April after vaulting 5.4% in March. The cost of imported food increased 1.7% after rising 1.6% in March. Excluding fuels and food, import prices jumped 0.6%. These so-called core import prices gained 0.1% in March. Core import prices rose 0.4% year-on-year in April.
Prices for imported capital goods edged up 0.1% last month. The cost of motor vehicles, parts and engines rose 0.3%. Imported consumer goods prices inched up 0.1%. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)
