March import prices up by most in nearly a year

WASHINGTON Wed Apr 11, 2012 11:12am EDT

China Shipping containers lie on the dock after being imported to the U.S. in Los Angeles, California, October 7, 2010. REUTERS/Lucy Nicholson

China Shipping containers lie on the dock after being imported to the U.S. in Los Angeles, California, October 7, 2010.

Credit: Reuters/Lucy Nicholson

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WASHINGTON (Reuters) - Import prices rose in March by the most in nearly a year on sharply higher petroleum costs, but prices outside food and energy climbed more modestly.

Overall import prices rose 1.3 percent, the Labor Department said on Wednesday. That was the biggest gain since April 2011.

Higher gasoline prices are weighing on the economy which is already struggling with high unemployment and a moribund housing sector following the 2007-2009 recession.

A separate report showed applications for U.S. home mortgages fell last week despite a drop in the average interest rate for 30-year mortgages.

Economists polled by Reuters had expected import prices to rise 0.8 percent last month. February's data was revised to show a 0.1 percent decline instead of the previously reported 0.4 percent increase.

Imported petroleum prices increased 4.3 percent, the biggest gain since April 2011.

Markets showed little reaction to the data. Stock futures were higher, pointing to a firmer open after five days of losses. Treasury debt prices were lower.

Higher prices for energy have fueled inflation in recent months but a still-weak jobs market has made it harder for businesses to pass those costs on to consumers.

The National Federation of Independent Business said on Tuesday that rising prices also are weighing on sentiment among small businesses owners. Last month, 9 percent of firms surveyed by the NFIB said inflation was their top business problem.

A report last week showing slower job growth in March has fueled speculation the U.S. Federal Reserve could ease monetary policy further. Most major Wall Street firms expect the Fed to launch a third round of bond buying, a Reuters poll found on Monday.

The Labor Department report showed that, stripping out petroleum, import prices increased 0.3 percent last month after falling 0.1 percent in February.

Data on Thursday is expected to show tame price pressures at a wholesale level, with producer prices seen rising 0.2 percent in March when stripping out food and energy.

But Wednesday's report underscores the size of the price shock that is stinging Americans when they refuel their cars.

Elsewhere, imported capital goods prices edged 0.2 percent higher after being flat in February. Imported motor vehicle prices climbed 0.3 percent after being unchanged in February.

The Labor Department report also showed export prices rose 0.8 percent last month, above analysts' expectations for a 0.4 percent gain. Export prices increased 0.4 percent in February.

(Additional reporting by Leah Schnurr in New York; Editing by Andrea Ricci)

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Comments (4)
txgadfly wrote:
Look, this is not a “recovery”. This is not a “recession”. This is a profound change in the economic and social structure of our country. The closest word is “depression”. Even in 1932, at the bottom, more than 75% of workers had jobs. And it got better in 1933, a bit. That was still depression.

You cannot take action to destroy the middle class, which provided the largest market on the planet for over a half century, without having a widespread impact. The Government has been holding its head under water for a long time, and now well over half of them are gone in the past 5 years. There are fewer every single week. The world has already changed. Try to catch up.

Apr 11, 2012 1:25pm EDT  --  Report as abuse
neahkahnie wrote:
@bxgadfly: You are SO right. This is a Depression. I’ve been saying this for a few years now (since ’09). As an historian and conversant in the New Deal, I totally agree with you. Thanks for adding your voice regarding this.

Apr 11, 2012 2:19pm EDT  --  Report as abuse
neahkahnie wrote:
Why is the government adding to this lie about prices “other than food and energy?” We all eat and we all use energy to power our cars, houses, etc. It’s been a lie since the greatest liar of them all–LBJ, the President who lied us into Vietnam.

Apr 11, 2012 2:21pm EDT  --  Report as abuse
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