US import prices rise solidly in June

US import prices increased solidly in June as bottlenecks in the global supply chain persisted, the latest indication that inflation could remain elevated for a while amid strong domestic demand fueled by the economy's reopening and fiscal stimulus. 

Still, prices appeared to have peaked. Import prices rose 1.0 per cent last month after surging a 1.4 per cent in May, the Labor Department said on Thursday.

The eighth straight monthly gain left the year-on-year increase at 11.2 per cent compared with 11.6 per cent in May. Economists polled by Reuters had forecast import prices, which exclude tariffs, increasing 1.2 per cent.

The government reported this week that consumer prices increased by the most in 13 years in June, while producer prices accelerated.

Covid-19 vaccinations, low interest rates and nearly $6 trillion in government relief since the pandemic started in the United States in March 2020 are fueling demand, straining the supply chain.

Federal Reserve Chair Jerome Powell told lawmakers on Wednesday that "inflation has increased notably and will likely remain elevated in coming months before moderating."

Imported fuel prices advanced 4.7 per cent last month after rising 5.5 per cent in May.

Petroleum prices gained 4.6 per cent, while the cost of imported food increased 1.9 per cent. Excluding fuel and food, import prices climbed 0.6 per cent. These so-called core import prices shot up 1.1 per cent in May.

The report also showed export prices increased 1.2 per cent in June after rising 2.2 per cent in May. Prices for agricultural exports advanced 1.5 per cent. Nonagricultural export prices gained 1.1 per cent.

Export prices increased 16.8 per cent year-on-year in June after surging a 17.5 per cent in May.