U.S. import prices rise more than expected in May as export prices also advance

U.S. import prices increased more than economists had expected in May, according to a Labor Department report cited by multiple news services. The data added another sign that trade-related price pressures were firmer at the start of the month than many market participants had anticipated, even as broader financial markets were waiting for additional economic information later in the week.

The report showed import prices rose 1.9% in May, a stronger result than the 1.0% increase expected by analysts, according to ForexLive. The prior month’s reading was also revised higher, from 1.9% to 2.0%, indicating that the pace of imported goods inflation had been a bit stronger than first reported. On a year-over-year basis, import prices were reported to be up 6.7%, underscoring that costs for goods entering the United States remained elevated compared with a year earlier.

Export prices also moved higher in May, though the rise was more modest than the increase in import prices. According to the same report, export prices climbed 1.3% in the month, slightly above the 1.2% expected by economists. The previous month’s export price gain was revised from 3.3% to 3.5%, suggesting exporters had been able to secure somewhat stronger prices than initially estimated in the prior period. The annual comparison for export prices was not provided in the source material.

The Labor Department release was described by Nasdaq as showing that import prices in the United States “shot up by much more than expected” in May. While the report did not provide a broader policy assessment, the figures are closely watched because import and export prices can influence readings on inflation, corporate margins and the cost environment facing businesses that rely on global trade. A stronger-than-expected increase in import prices can indicate that foreign-currency movements, commodity costs or supplier pricing are feeding through to U.S. buyers.

ForexLive noted that the U.S. dollar was relatively flat ahead of the release as traders waited for another Wednesday data point. That snapshot suggests the market was not positioned for a dramatic immediate reaction before the import price figures were published. Even so, the data offered fresh evidence that price trends in trade were still moving in ways that could matter for inflation tracking, especially when combined with other upcoming economic reports.

The revised prior readings for both import and export prices are also likely to draw attention from analysts parsing the underlying trend. Revisions can change how a single monthly report is interpreted, especially when they show that the earlier month was stronger than first thought. In this case, the upgrade to the previous import price reading and the higher revision to export prices both point to a somewhat firmer trade-price backdrop than initial estimates suggested.

For market participants, the report adds one more piece to the inflation picture without providing a full answer on the direction of future price pressures. Import prices can affect domestic inflation through input costs and consumer goods pricing, while export prices offer insight into demand and pricing power for U.S. producers abroad. Tuesday’s report showed both measures moving higher in May, with import prices posting the larger increase and export prices also rising modestly.