The U.S. Labor Department released new data on Thursday, revealing that import prices experienced a slight uptick in December, consistent with analysts' projections and continuing the trend observed in the previous months of November and October. Specifically, import prices edged higher by 0.1 percent during December.
On an annual basis, the growth in import prices accelerated to 2.2 percent in December, up from November's 1.4 percent, marking the highest rate of annual growth since December 2022's 3.2 percent surge.
The modest increase in monthly import prices was largely driven by a rise in fuel import prices, which climbed 1.4 percent in December following a 0.9 percent increase the prior month. However, even when excluding the significant hike in fuel import prices, import prices still rose by 0.1 percent for the second straight month.
The department highlighted that a substantial 2.8 percent rise in the prices for foods, feeds, and beverages was significant enough to counterbalance declining prices in non-fuel industrial supplies, materials, capital goods, and automotive vehicles. Non-fuel import prices saw a 2.4 percent increase on an annual basis for the third consecutive month.
Matthew Martin, a Senior U.S. Economist at Oxford Economics, remarked, "The modest rise in import prices in December concludes an optimistic week for inflation data and maintains the Federal Reserve on its path to potentially cutting rates within the first half of the year." He also noted, "With global oil prices trending upward, higher fuel import prices may introduce some volatility to future data, but the Fed is expected to overlook any transient sources of inflation."
The report further noted that export prices increased by 0.3 percent in December, following an unchanged reading in November. This exceeded expectations of a 0.2 percent rise. Annually, export prices grew by 1.8 percent in December, accelerating from 0.9 percent in November, representing the most rapid year-over-year growth since January 2023’s 2.0 percent rise.
Agricultural export prices rose by 0.5 percent in December after a 0.1 percent increase in November, while non-agricultural export prices advanced by 0.3 percent in December, following no change in November.
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