US import prices increase; post largest annual gain in more than four years

Business Recorder reported that US import prices rose more than forecast in September, driven by higher energy costs and a broader set of goods. The 1.1 percent monthly gain followed a revised 0.5 percent rise in August, according to the Labor Department report released on Friday. Over the 12 months to September, import prices climbed 8.1 percent, the steepest annual increase since July 2022.

Economists have attributed the trend to tariffs imposed under President Donald Trump and to the Middle East conflict, which has disrupted supply chains and kept oil prices elevated. Fuel import prices rebounded 4.8 percent, while food prices were flat after a 0.6 percent drop in August. Excluding food and fuel, import prices advanced 0.7 percent, and imports from China rose at the fastest pace since December 2021.

Capital goods prices gained 0.9 percent, lifted by computers, semiconductors and an investment boom, while air passenger fares surged 12.6 percent. The fare jump may affect the Personal Consumption Expenditures price measures that the Federal Reserve tracks for its 2 percent inflation target. Financial markets still expected the Federal Reserve to skip a rate hike later this month, despite the stronger inflation data.