WASHINGTON (Reuters) – U.S. import prices unexpectedly rose in February amid higher costs for consumer goods, which does not bode well for the inflation outlook.
Import prices increased 0.4% last month, matching January’s upwardly revised gain, the Labor Department’s Bureau of Labor Statistics said on Tuesday.
Economists polled by Reuters had forecast import prices, which exclude tariffs, dipping 0.1% following a previously reported 0.3% rise in January.
In the 12 months through February, import prices increased 2.0% after advancing 1.8% in January.
Government data last week showed better-than-expected consumer and producer price readings in February, though there were firmer readings in the details that go into the calculation of the Personal Consumption Expenditures (PCE) price indexes, the inflation measures tracked by the Federal Reserve for its 2% target.
U.S. central bank officials meeting on Tuesday and Wednesday are expected to leave the Fed’s benchmark overnight interest rate in the 4.25%-4.50% range, having reduced it by 100 basis points since September, and continue to assess the economic impact of President Donald Trump’s policies.
Trump’s slew of tariffs have unleashed a trade war, igniting worries about inflation as well as job losses. Financial markets expect the Fed to resume cutting borrowing costs in June, after it paused its easing cycle in January. The policy rate was hiked by 5.25 percentage points in 2022 and 2023.
Imported fuel prices increased 1.7% in February after surging 3.5% in January. Food prices were unchanged after climbing 0.2% in January.
Excluding fuels and food, import prices shot up 0.4% after being unchanged in January.
In the 12 months through February, core import prices rose 1.4%, reflecting earlier dollar strength against the currencies of the United States’ main trade partners.
Prices of imported capital goods fell 0.2% after gaining 0.1% in January. Imported automotive vehicles, parts and engines prices were unchanged.
Imported consumer goods, excluding automotives, surged 0.4% after declining for two straight months.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)
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