US import prices remain unchanged as oil prices fall

WASHINGTON, May 13 (Reuters) – U.S. import prices held unexpectedly steady in April as lower oil costs offset gains in food and other commodities, a further sign that inflation has probably peaked, although it will remain high.

The unchanged reading for import prices follows a 2.9% rise in March, the Labor Department said Friday. In the 12 months to April, import prices rose 12.0% after accelerating 13.0% in the year to March. Economists polled by Reuters had forecast import prices, which exclude tariffs, to rise 0.6%.

Import prices rose 6.8% from the first quarter.

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Government data this week showed monthly consumer prices rose at the slowest pace in eight months, while the gain in producer prices was the smallest since last September.

With oil prices rising in May, monthly import, consumer and producer prices are expected to pick up. Annual inflation rates should continue to decline slightly, although they will likely remain above the Federal Reserve’s 2%.

The deceleration is mainly the result of last year’s sharp increases that were removed from the calculation.

Last week, the Fed raised its key rate by half a percentage point, the biggest hike in 22 years, and said it would start reducing its bond holdings next month. The US central bank began raising rates in March.

Imported fuel prices fell 2.4% last month after climbing 17.3% in March. Oil prices fell 2.9%, while the cost of imported food rose 0.9%. Prices for imported capital goods rose 0.4%, matching the gain in March. The cost of imported consumer goods excluding motor vehicles remained unchanged. Prices for imported motor vehicles and their parts rose 0.3%.

Excluding fuel and food, import prices rose 0.4%. These so-called core import prices rose 1.3% in March. They rose 6.9% year on year in April.

Part of the slowdown in monthly core import price gains reflects the strength of the dollar against the currencies of major US trading partners. The greenback has gained about 2.65% on a weighted basis since the Fed started raising interest rates.

The price of goods imported from China rose 0.2% after rising 0.5% in March. They increased by 4.6% over one year.

The report also showed export prices rose 0.6% in April after jumping 4.1% in March. Prices for agricultural exports rose 1.1%, a slowdown from the 4.3% acceleration recorded in March. Rising prices in April for corn, cotton, meat and tree nuts more than offset lower prices for wheat and soybeans.

Non-agricultural export prices rose 0.5%. Export prices rose 18.0% year-on-year in April. This followed an 18.6% advance in March.

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Reporting by Lucia Mutikani Editing by Mark Potter and Paul Simao

Our standards: The Thomson Reuters Trust Principles.

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