WASHINGTON (Reuters) -U.S. import prices unexpectedly rose in April as a surge in the cost of capital goods offset cheaper energy products.
Import prices gained 0.1% last month after dropping 0.4% in March, the Labor Department’s Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast import prices, which exclude tariffs, would decrease 0.4%. In the 12 months through April, import prices edged up 0.1%.
Data this week showed benign consumer and producer price readings in April. Economists expect the impact of President Donald Trump’s sweeping import duties to become evident in inflation data by the middle of this year.
The tariffs have raised fears of a slowdown in global growth, contributing to a dampening of oil prices.
Federal Reserve Chair Jerome Powell warned on Thursday that “we may be entering a period of more frequent, and potentially more persistent, supply shocks – a difficult challenge for the economy and for central banks.”
Economists expect the U.S. central bank will resume cutting interest rates either in September or December. The Fed left its benchmark overnight interest rate in the 4.24%-4.50% range earlier this month.
Imported fuel prices fell 2.6% in April after decreasing by 3.4% in March. Food prices were unchanged after dipping 0.1% in the prior month. Excluding fuels and food, import prices shot up 0.5%. That followed a 0.1% dip in March. In the 12 months through March, the so-called core import prices increased 0.8%. Prices for imported capital goods jumped 0.6%, while those of consumer goods excluding motor vehicles increased 0.3%. Prices for imported motor vehicles, parts and engines rose 0.2%.
The weakness of the dollar is likely contributing to the firmness in these import prices.
Trump’s aggressive trade policies have rattled investors’ confidence in the dollar, leading to a sharp fall in U.S. assets. The trade-weighted dollar is down about 5.1% this year, with most of the depreciation occurring in April.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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