US import prices increased marginally in February as a surge in the cost of petroleum products was partially offset by modest gains elsewhere, which bodes well for the inflation outlook.

Import prices rose 0.3 per cent last month after an unrevised 0.8 per cent jump in January, the Labor Department’s Bureau of Labor Statistics said on Friday (Mar 15). The increase in import prices, which exclude tariffs, was in line with economists’ expectations.

In the 12 months through February, import prices dropped 0.8 per cent after declining 1.3 per cent in January. Government data this week showed both consumer and producer prices increased strongly for the second consecutive month in February.

Financial markets still expect the Federal Reserve to start cutting interest rates by June, though firmer inflation readings, if sustained, could delay the expected easing in borrowing costs until the second half of the year.

Since March 2022, the Federal Reserve has raised its policy rate by 525 basis points to the current 5.25 per cent to 5.50 per cent range.

Imported fuel prices shot up 1.8 per cent in February after rebounding 1.2 per cent in the prior month. The cost of imported food increased 1.1 per cent after advancing 1.7 per cent in January.

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Excluding fuels and food, import prices gained 0.1 per cent. These so-called core import prices increased 0.7 per cent in January. They fell 0.7 per cent on a year-on-year basis in February.

Prices for imported capital goods rose 0.2 per cent last month after increasing 0.4 per cent in January. The cost of motor vehicles, parts and engines edged up 0.1 per cent.

Imported consumer goods prices excluding automotives climbed 0.3 per cent after surging 1.2 per cent in January. REUTERS