Bloomberg News
The numbers: The import price index rose 0.3% in April because of the higher cost of oil. This was softer than the 0.5% gain expected by economists surveyed by Econoday. Excluding fuel, import prices rose 0.2% last month, the government said.
What happened: The cost of imported oil rose 1.6% in April, more than offsetting a 4.4% drop in natural gas prices. Import fuel prices advanced 18.7% over the past year. The rate of import inflation over the past 12 months has held steady at 3.3% in each of the past three months. Its core index, excluding food and fuel, was up 1.8%.
Big picture: Import prices are expected to edge gradually higher in the coming months. The Federal Reserve is watching inflation closely to determine whether to raise interest rates three or four times in 2018. The rate of inflation is now close to 2% based on the Fed’s preferred personal consumption expenditure price gauge.
What they’re saying: “Recent trends of a weaker real trade weighted dollar measured on a y/y basis have put upward pressure on the y/y rate of increase in core import prices, and a bit more could still be in the pipeline,” said Josh Shapiro, chief U.S. economist at MFR Inc.
Market reaction: U.S. stock futures were trading higher on Friday, with the Dow Jones Industrial Average poised for its seventh straight gain. The 10-year Treasury note yield slipped to 2.958%.