Import Prices Surge Higher in October

Import prices rose more than expected last month, lead by higher oil prices(+6.9% MoM), the largest monthly gain since March. Import prices rose +1.8% MoM (consensus +1.2%), the fastest gain in a year and a half, from a revised gain of +.8% MoM (originally reported at 1%) in September. The change over the last year has been even more dramatic, rising +9.6% YoY(consensus 9%), up from +5% YoY last month. This was the largest annual increase in over two years. When petroleum prices are excluded, prices rose +.5% MoM (+3.2% YoY) as food (+1% MoM) and industrial supplies (+4.5% MoM, +25% YoY) also rose during the month.

Prices for goods imported from China accelerated higher in October, growing by +.3% MoM versus +.1%MoM in September, and are up +2.2% YoY. Goods from Europe rose +.6% MoM, and those from Latin America rose +2.5% MoM. Goods from Canada rose +1.8% MoM and are up +11.4% YoY. Canada is a major energy exporter to the US.

This data will keep the Fed concerned about inflationary pressures as the dollar continues to weaken pushing up costs for imported items. Oil prices have risen 41% YoY, and the dollar has lost approximately 12% YoY based on the dollar index.