Weaker dollar may be building inflationary pressures
WASHINGTON (MarketWatch) - Led by higher prices for energy goods, the prices of goods imported into the United States rose by 0.7% in October, the third increase in a row, the Labor Department estimated Friday.
Import prices have risen in seven of the past eight months and are up 8.1% over that time. In the past year, import prices have fallen 5.7%, well off the record 19.1% decline in the 12 months ending in July.
Economists surveyed by MarketWatch were expecting import prices to rise 0.8% in October after rising a revised 0.2% in September. See Economic Calendar.
Fuel prices rose 1.8% in October, reversing a 1.5% decline in September. Natural gas prices jumped 24.1% in October. Imported petroleum prices rose 0.9%. Imported fuel prices are down 15.4% in the past year.
Prices of nonfuel imports rose 0.4%, the third increase in a row. Prices of nonfuel imports have fallen 2.9% in the past year, showing that general deflationary pressures weren't confined to energy goods.
The value of the dollar has dropped about 7% so far this year and fell to a 15-month low earlier this week. A weaker dollar makes imports priced in other currencies relatively more expensive. Some analysts are concerned that the weakening dollar could lead to higher inflation in the United States through import prices.
Details
Prices of goods exported from the United States rose 0.3% in October, and are down 3.4% in the past year. Prices of agricultural exports fell 1%. Nonagricultural export prices rose 0.3%.
Accelerating import prices in October were largely confined to industrial supplies, which jumped 1.8% in price. Prices of petroleum imports rose 0.9%.
Prices of nonfuel industrial supplies increased 1.6%, led by metals.
Prices of imported capital goods rose 0.2%, the largest increase in more than a year.
Prices of imported autos rose 0.6%, the largest gain since December 2007. Prices of imported consumer goods excluding autos rose 0.3%.
Prices of exports from the United States rose 0.3%, led by a 1% increase in prices of industrial supplies. Prices of exported capital goods rose 0.2% and are up 2% in the past year.
In the past year, export prices are down 3.4%, off the record 8.3% decline recorded in July.
Prices of goods imported from Canada rose 1.2%, while Mexican import prices rose 0.7%.
Prices of European imports increased 0.6%.
Prices of Chinese goods rose 0.1%. Japanese import prices rose 0.2%.
