The numbers: The cost of imported goods jumped 0.8% in January, marking the first increase since last fall and the biggest rise in almost two years.
The higher cost of imported goods was fueled in part by rising gas prices, but most other categories also showed increases. Import prices minus fuel rose 0.7% last month, the government said
Some economists said the increase in import prices was tied in part to shipping disruptions in the Middle East, where cargo vessels have been attacked.
“This is the first month of data that contains higher goods prices due to supply disruptions and higher shipping costs,” said Matthew Martin, U.S. economist at Oxford Economics.
Until the January report, the cost of imported goods had fallen steadily and contributed to lower U.S. inflation.
Another inflation report published earlier this week, the consumer-price index, was also worse than expected.
Economists polled by the Wall Street Journal had estimated a 0.1% drop in the import-price index.
Key details: Putting January aside, import prices have fallen 1.3% in the past year. They are down 0.3% in the same span if fuel is excluded.
Cheaper import prices help to lower U.S. inflation because Americans buy so many foreign-made products such as oil, cell phones and cars.
Imports also increase competition, another mechanism to help lower prices.
Big picture: Inflation in the U.S. is waning, but it’s higher than it was before the pandemic.
The Federal Reserve is aiming to reduce the rate of inflation to 2% within the next year or two, but as the recent CPI report showed, the road to 2% might be bumpy.
Market reaction: The Dow Jones Industrial Average
DJIA
and S&P 500
SPX
rose in Thursday trading.
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