The numbers: The cost of U.S. imported goods rose 0.4% in April, the Labor Department said Friday. This was the first increase this year.
Economists polled by the Wall Street Journal had forecast a 0.3% gain.
Over the past 12 months, the costs of imports has dropped 4.8%. That followed a 12.5% gain in the prior year.
Key details: The cost of imported fuel rose 4.5% in April after a 3.9% drop in the prior month. This was the first increase since last June.
The cost of imports excluding fuel were flat in April after a 0.5% decline in the prior month. Over the past year, nonfuel import prices are down 1.9%.
Exports prices rose 0.2% in April. They are down 5.9% over the past year.
Big picture: The stronger dollar last year dampened import prices and was a source of disinflation, but with the dollar softer this year, prices are firming.
One sign perhaps of the weaker dollar is that consumer goods prices ex-autos rose 0.2% in April and are up 1.1% annualized over the past three months, said Michael Gapen, U.S. economist at Bank of America Securities.
What are they saying? “Perhaps imported inflation is the first early signal of how brutal the fight against inflation will be in the coming months. Investors and traders should remember that the Fed’s target is 2%,” said Alex Kuptsikevich, senior market analyst at FXPro.
Market reaction: Stocks
DJIA,
SPX,
were lower in volatile morning trading on Friday. The yield on the 10-year Treasury note
TMUBMUSD10Y,
rose to 3.45%.
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