Prices of goods imported into the U.S. rose more than forecast in April, driven by gains in fuel and food that may put pressure on some companies to raise prices.
The 2.2 percent increase in the import-price index followed a revised 2.6 percent gain in March, Labor Department figures showed today in Washington. Economists projected a 1.8 percent increase, according to the median estimate in a Bloomberg News survey. Prices excluding fuel advanced 0.6 percent.
Growing demand from economies in Asia and Latin America, paired with a weaker dollar, may keep pushing up the cost of goods from overseas. While businesses like Whole Foods Market Inc. are trying to decide whether to pass increased prices onto consumers, Federal Reserve Chairman Ben Bernanke said he expects elevated commodity costs to moderate.
“Gasoline prices and food prices are rising and crimping the spending power of American households,” James Shugg, a senior economist at Westpac Banking Corp. in London, said before the report. “The U.S. dollar is part of the rise, too.”
Projections ranged from increases of 1 percent to 2.5 percent, according to the median forecast in a Bloomberg News survey of 51 economists.
Compared with a year earlier, import prices increased 11 percent, exceeding the 10 percent increase projected by economists surveyed and the biggest 12-month gain in a year.
The cost of imported petroleum increased 7.2 percent from the prior month and was up 37 percent from a year earlier.
Stock-index futures rose after the report. The contract on the Standard & Poor’s 500 Index maturing in June increased 0.5 percent to 1,349.60 at 8:32 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 3.17 percent from 3.16 percent late yesterday.
Excluding all fuels, import prices climbed 4.3 percent from April 2010, matching the prior month’s 12-month increase as the biggest since October 2008.
Imported food was 1.8 percent costlier last month and was up 20 percent from a year earlier, the biggest 12-month increase since records began in 1977.
Whole Foods, the largest U.S. natural-goods grocer, says prices may continue to climb later this year, according to A.C. Gallo, president and chief operating officer of the Austin, Texas-based company. Beef, dairy, corn and soy are major among commodities experiencing inflation, he said.
“We have been able to pass some of them through,” Gallo said in a May 4 earnings call with analysts, referring to cost increases. “There is some uncertainty based on not quite understanding what kind of inflation we’ll be seeing in our costs and what will be able to pass through.”
Costs of imported automobiles rose 0.4 percent from the prior month, today’s report showed. Consumer goods excluding vehicles showed a 0.4 percent increase after falling 0.2 percent in March.
Imported capital goods prices were increased 0.1 percent.
Following a two-day meeting in Washington, Federal Reserve officials forecast that a measure of prices tied to consumer spending will increase between 2.1 percent and 2.8 percent this year before moderating.
“Increases in commodity prices are in turn boosting overall consumer inflation,” Bernanke said at a press conference following the meeting. “However, measures of underlying inflation, though having increased modestly in recent months, remain subdued, and longer-term inflation expectations have remained stable.”
The central bank’s preferred price gauge, which excludes food and fuel, rose 0.9 percent in March from a year earlier. Fed policy makers aim for long-run overall inflation of 1.7 percent to 2 percent.
The officials also lowered their forecasts for U.S. growth, saying the economy is recovering at a “moderate pace,” and agreed to finish $600 billion of bond purchases on schedule in June, according to an April 27 statement from the Federal Open Market Committee.
A weakening U.S. currency has also made imported goods more expensive. The dollar fell 7.7 percent against a basket of major currencies from the beginning of the year to the end of April.
Today’s report showed the cost of goods from China rose 0.4 percent, while those from Japan were increased 0.3 percent. Goods from Latin America climbed 3.5 percent and those from the European Union increased 0.8 percent. Prices of Canadian imports rose 2.4 percent, and goods from Mexico advanced 2.5 percent.
U.S. export prices increased 1.1 percent after rising 1.5 percent the previous month, today’s figures showed. Prices of farm exports climbed 0.6 percent, while those of non-farm goods advanced 1 percent.
The import-price index is the first of three monthly price gauges from the Labor Department. Producer prices are due May 12 and the consumer-price index on the following day. The Bloomberg survey median for those measures indicates inflation excluding volatile food and fuel expenses remains contained.
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