US May Import Prices Rise 1.9%, Up 6.7% on Year for Biggest Gain Since August 2022

U.S. import prices rose more than expected in May, driven by higher fuel and capital goods costs, posting the biggest annual increase since August 2022.

The Bureau of Labor Statistics said June 16 that import prices climbed 1.9% in May from a month earlier. From a year earlier, they rose 6.7%.

Economists had expected import prices excluding tariffs to increase 1.0% in May after a 1.9% gain in April. Instead, the reading came in well above that forecast. April was revised up to a 2.0% monthly increase, while the annual gain was 4.2%.

Imported fuel prices jumped 12.5% last month after rising 18.6% in April. Prices for imported capital goods increased 1.3%. A surge in investment tied to artificial intelligence is helping drive up imported capital goods prices.

The Bureau of Labor Statistics said last week that the consumer price index rose in May at the fastest pace in three years. Producer prices posted their biggest increase in three and a half years.

Rising prices and a steady labor market had fueled expectations that the Federal Reserve could raise interest rates. But a ceasefire agreement between the U.S. and Iran this week sent international oil prices lower, adding a major variable to the rate outlook.

The Fed was set to begin a two-day policy meeting on June 16. Economists expect the central bank to keep its benchmark rate in a 3.50% to 3.75% range while moving away from its rate-cut stance.

Kim Jung-a, contributing reporter, Hankyung.com, kja@hankyung.com