WASHINGTON (Reuters) - U.S. import prices increased by the most in nearly nine years in January, lifted by higher prices for energy products and a weak dollar, supporting expectations for an acceleration in inflation in the coming months.
The Labor Department said on Thursday import prices jumped 1.4% last month, the biggest gain since March 2012, after increasing 1.0% in December.
Economists polled by Reuters had forecast import prices, which exclude tariffs, gaining 1.0% in January. In the 12 months through January, import prices rebounded 0.9% after slipping 0.3% in December. That was the biggest year-on-year gain since October 2018 and followed 11 straight monthly declines.
Inflation is being closely watched amid concerns from some quarters that President Joe Biden's proposed $1.9 trillion COVDO-19 recovery plan could cause the economy to overheat. But inflation is likely to be driven by the labor market, which is experiencing considering slack.
The government last week reported a moderate increase in consumer prices in January. Producer prices recorded their largest increase since 2009 in January, in part reflecting bottlenecks in the supply chain caused by the coronavirus pandemic.
Imported fuel prices increased 7.4% last month after soaring 8.1% in December. Imported food prices surged 2.1%.
Excluding fuels and foods, import prices accelerated 0.8% after gaining 0.4% in December. The rise in the so-called core import prices reflected the dollar's 2.7% drop last year against the currencies of the United States' main trade partners.
Last month, the cost of goods imported from China rose 0.3% for a second straight month. Prices for imported capital goods gained 0.2%. The cost of imported motor vehicles rose 0.2%. Prices for consumer goods excluding autos dipped 0.1%.
The report also showed export prices surged 2.5% in January, the largest rise since the index was first published on a monthly basis in December 1988, after increasing 1.3% in December. Prices for agricultural exports rose 6.0%, while nonagricultural exports increased 2.2%.
Export prices increased 2.3% on a year-on-year basis in January, the largest gain October 2018, after rising 0.4% in December.