US import prices rise by less than forecast in October

Import prices in the States rose by less than expected last month despite a large increase in the cost of fuel imports.

The US import price index advanced at a 0.2% pace month-on-month in October, according to the Bureau of Labor Statistics.

Economists had anticipated a rose of 0.4% on the month.

According to the breakdown provided by the government, fuel import prices were 1.4% (13.2% year-on-year) higher in comparison to September and those of non-fuel items by 0.2% (1.4% year-on-year).

Consensus had been expecting a 0.3% rise in non-fuel import prices.

Versus a year ago, total import prices were 2.5% higher.

On the export side of the equation, prices were flat on the month, although those for agricultural products rose by 1.9%, and 2.7% higher in comparison to the same month one year ago.

Commenting on Thursday's data, Michael Gapen at Barclays said: "Import prices for industrial supplies and capital goods continue to move higher, indicating that the acceleration in business investment for much of this year may be putting upward pressure on prices of capital-related products. That said, consumer goods imports have not shown the same trend firming, despite the roughly 10% depreciation in the trade-weighted US dollar year-to date.

"This is consistent with our forecast for consumer prices, which points to a removal of much of the recent disinflation from base effects in early 2018, but a slow return thereafter to the Fed’s 2.0% target."