Post by jeffolie on Dec 12, 2007 15:51:40 GMT -6
Import prices rise 2.7%, the most in 17 years
Nonfuel import prices rise 0.5% because of higher commodities prices
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) -- Driven by a weaker dollar and much higher prices for petroleum and natural gas, import prices surged 2.7% in November, the largest monthly increase in 17 years, the Labor Department reported Wednesday.
Even excluding fuels, import prices rose 0.5%.
Import prices have now risen 11.4% in the past year, the largest gain in the 25-year history of the import price index. Import prices increased a downwardly revised 1.4% in October.
The report comes one day after the Federal Reserve cut its overnight interest rate target by a quarter percentage point, citing slower economic growth. However, the Fed also said some inflationary pressures remain, which could be an argument against cutting rates further.
The import price index report certainly highlighted the inflationary dangers facing the Fed and the economy. More bad inflationary news is likely over the next two days with the release of the producer price index on Thursday and the consumer price index on Friday.
"Today's data imply substantial upside inflation risk over the near-term," wrote Mike Englund, chief economist for Action Economics.
Others are more sanguine. The fact that consumer goods prices rose just 0.2% "indicates little risk of an inflation pass-through at this time," wrote Drew Matus, an economist for Lehman Bros.
Intense competition has limited the ability of firms to pass along 100% of the higher prices they must pay. Profit margins are squeezed instead.
In a separate report, the Commerce Department said the trade gap widened slightly in October to $57.8 billion from $57.1 billion because of higher petroleum prices.
Export prices
Prices received by U.S. producers also jumped in November, rising 0.9%, the biggest increase in 12 years. Export prices are up 6.1% in the past year, also the largest yearly gain in 12 years.
Prices of agricultural exports rose 1.4%, the sixth straight month of 1%-plus gains. Agricultural export prices are up 23% in the past year, reflecting the weaker dollar and the boom in commodity prices.
www.marketwatch.com/news/story/import-prices-rise-27-november/story.aspx?guid=%7BAE22879A%2D0A22%2D4910%2D9ACB%2D0130365B4E3B%7D&siteid=yhoof
Nonfuel import prices rise 0.5% because of higher commodities prices
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) -- Driven by a weaker dollar and much higher prices for petroleum and natural gas, import prices surged 2.7% in November, the largest monthly increase in 17 years, the Labor Department reported Wednesday.
Even excluding fuels, import prices rose 0.5%.
Import prices have now risen 11.4% in the past year, the largest gain in the 25-year history of the import price index. Import prices increased a downwardly revised 1.4% in October.
The report comes one day after the Federal Reserve cut its overnight interest rate target by a quarter percentage point, citing slower economic growth. However, the Fed also said some inflationary pressures remain, which could be an argument against cutting rates further.
The import price index report certainly highlighted the inflationary dangers facing the Fed and the economy. More bad inflationary news is likely over the next two days with the release of the producer price index on Thursday and the consumer price index on Friday.
"Today's data imply substantial upside inflation risk over the near-term," wrote Mike Englund, chief economist for Action Economics.
Others are more sanguine. The fact that consumer goods prices rose just 0.2% "indicates little risk of an inflation pass-through at this time," wrote Drew Matus, an economist for Lehman Bros.
Intense competition has limited the ability of firms to pass along 100% of the higher prices they must pay. Profit margins are squeezed instead.
In a separate report, the Commerce Department said the trade gap widened slightly in October to $57.8 billion from $57.1 billion because of higher petroleum prices.
Export prices
Prices received by U.S. producers also jumped in November, rising 0.9%, the biggest increase in 12 years. Export prices are up 6.1% in the past year, also the largest yearly gain in 12 years.
Prices of agricultural exports rose 1.4%, the sixth straight month of 1%-plus gains. Agricultural export prices are up 23% in the past year, reflecting the weaker dollar and the boom in commodity prices.
www.marketwatch.com/news/story/import-prices-rise-27-november/story.aspx?guid=%7BAE22879A%2D0A22%2D4910%2D9ACB%2D0130365B4E3B%7D&siteid=yhoof