U.S Import Prices Rise 0.5% In October

Reflecting a substantial increase in fuel prices, the Labor Department released a report today showing a slightly bigger than expected increase in U.S import prices in the month of October.

The import-price index, measuring the cost of goods ranging from Canadian oil to Chinese electronics, rose 0.5% from a month earlier, the Labor Department said earlier today, while economists surveyed expected prices to rise 0.3%.

Prices for imported capital goods slipped 0.2 percent, while the cost of imported automobiles increased 0.3 percent. Imported consumer goods prices excluding automobiles edged up 0.1 percent last month.

In the 12 months through October, import prices fell 0.2 percent, the smallest decrease since July 2014, after declining 1.0 percent in September.

The increase in import prices was driven by higher fuel prices, which surged up by 7.2 percent in October after jumping by 1.5 percent in September.

On the other hand, the Labor Department said non-fuel import prices edged down by 0.1 percent for the second straight month

The continued drop in non-fuel prices reflected falling prices for non-fuel industrial supplies and materials, capital goods, and foods, feeds, and beverages.

Import prices have been held down by low commodity prices and a strong dollar.

But a small rebound in oil prices is checking that trend. The price of imported petroleum rose 7.5% in October from a month earlier. It was up 4.5% from a year earlier, the first year-over-year increase since July 2014.

Outside of petroleum, import prices were down 0.1% over the month.

The price of a barrel of crude oil rose to more than $50 in October, above levels from earlier in the year though still far short of the $100 mark that was common through mid-2014.

The import-price index is one of several measures the Federal Reserve studies to gauge how quickly prices for goods and services are rising in the U.S.

The Fed’s preferred inflation gauge, the Commerce Department’s personal consumption price index, has fallen below the Fed’s target of 2% annual growth for more than four years.

The Fed stood pat on interest rates at its meeting in early November but is expected to lift rates at its December meeting.

Also today, the Labor Department said prices for U.S. exports rose 0.2% last month. From a year earlier, export prices were down 1.1%.