Businesses Seeing Higher Import Costs to Start the Year

Import prices jumpstarted the year with a 1.0 percent gain. Strength in the industrial side of the economy and weaker dollar are providing a lift to nonfuel import prices, while consumer import prices are little changed.

Not Just Energy Costs Pulling Import Prices Higher

• Import price inflation roared back in January, with prices increasing 1.0 percent. Fuel prices rose 4.7 percent as petroleum prices rose and natural gas prices jumped more than 20 percent for a third consecutive month (up 16.2 percent from a year ago).

• Ex-fuel, prices rose a stronger-than-expected 0.4 percent. Over the past year, nonfuel prices are up 1.9 percent on higher costs for industrial supplies, capital goods and autos.

Consumer Import Price Inflation More Subdued

• The cost of imported consumer goods was flat in January and remains down over the past year. This should help to keep a lid on overall consumer price inflation even as the dollar is expected to weaken further and support import price inflation more broadly.

• Stronger global growth and the weaker dollar have allowed exporters to gain some pricing power. Non-food and fuel exports rose 0.5 percent, bringing the year-ago gain to 2.5 percent.

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