U.S. import prices increased by the most in more than a year in May, driven by higher costs for petroleum products and food, which could further diminish fears of deflation as the economy battles a recession.
The Labor Department said on Friday import prices rose 1.0% last month, the largest gain since February 2019, after falling 2.6% in April.
Economists polled by Reuters had forecast import prices, which exclude tariffs, increasing 0.6% in May.
In the 12 months through May, import prices decreased 6.0% after dropping 6.8% in April.
The report followed data this week showing consumer prices falling moderately in May and producer prices rebounding. Deflation is a decline in the general price level, which is harmful during a recession as consumers and businesses may delay purchases in anticipation of lower prices.
The National Bureau of Economic Research, the arbiter of U.S. recessions, declared on Monday that the economy slipped into recession in February.
In May, prices for imported fuels and lubricants surged 20.5% after declining 31.0% in the prior month. Petroleum prices jumped 21.7% after plunging 32.6% in April. Imported food prices rebounded 2.2% last month after dropping 1.6% in April.
Excluding fuels and food, import prices dipped 0.1% last month after falling 0.5% in April. The so-called core import prices declined 0.7% in the 12 months through May.
The cost of goods imported from China was unchanged in May after gaining 0.1% in the prior month. Prices declined 1.0% year-on-year in May, the smallest drop since March 2019.
Last month, prices for imported capital goods was unchanged. The cost of imported motor vehicles dipped 0.1%. Prices for consumer goods excluding autos rose 0.1%.
The report also showed export prices increased 0.5% in May as higher prices for nonagricultural products offset lower prices for agricultural goods. That followed a 3.3% drop in April. Export prices declined 6.0% on a year-on-year basis in May after dropping 6.8% in April.