U.S. import prices increased more than expected in May as the cost of petroleum products rose and supply chain bottlenecks boosted prices of other goods, adding to signs that inflation was heating up amid a reopening economy.
Import prices rose 1.1% last month after gaining a 0.8% in April, the Labor Department said on Wednesday. The seventh straight monthly gain lifted the year-on-year increase to 11.3%, the largest rise since September 2011. Import prices surged 10.8% on a year-on-year basis in April.
Economists poll had forecast import prices, which exclude tariffs, rising 0.8%. Part of the acceleration in the year-on-year prices reflected the dropping of last spring’s weak readings from the calculation.
Data this month showed strong increases in producer and consumer prices in May. Vaccinations against COVID-19, trillions of dollars from the government and record-low interest rates are whipping up demand, leaving companies scrambling for raw materials and labor. But the higher inflation is largely viewed as transitory, with supply chains expected to adjust.
Imported fuel prices jumped 4.0% last month after rising 1.6% in April. Petroleum prices increased 3.8%, while the cost of imported food fell 0.4%. Excluding fuel and food, import prices rose 1.0%. These so-called core import prices advanced 0.7% in April.
The report also showed export prices jumped 2.2% in May after rising 1.1% in April. Prices for agricultural exports rose 6.1%, the largest gain since in November 2010.
Nonagricultural export prices rose 1.7%, lifted by industrial supplies and materials and consumer goods.
Export prices surged 17.4% year-on-year, the largest rise since the series started in September 1983, after advancing 14.9% in April.