Economic Report: Import prices jump 2% as biggest increase in 11 years adds to intense U.S. inflation

The numbers: The cost of imported goods leaped 2% in January — the biggest increase in almost 11 years — and added to the strongest surge in U.S. inflation since the early 1980s.

Economists polled by The Wall Street Journal had forecast a 1.2% advance.

Higher oil prices led the way, but the increase in prices was broad-based.

Import prices minus fuel rose 1.4% last month — the largest gain since the government began keeping records in 2002.

Over the past year, overall import prices has climbed 10.8%, just a touch below the pandemic peak.

Key details: The cost of imported fuel, food, drinks, autos, consumer goods and industrial supplies all rose in January.

U.S. export prices climbed 2.9% last month. They are up 15.1% in the past year.

Big picture: Inflation is rising in the U.S. and all around the world. Major disruptions tied to the pandemic are a big source of the price pressures, but government stimulus and easy-money policies by central banks have also contributed.

Inflation is expected to slow later in the year as supply-chain bottlenecks unwind, economists say, but prices are unlikely to return to pre-pandemic levels.

Market reaction: The Dow Jones Industrial Average

and S&P 500

fell in Wednesday trades. Stocks have been under pressure this year because of rising inflation and a pending increase in interest rates by the Federal Reserve.

This post was originally published on Market Watch

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