US fuel, food import costs up in May

 US import prices provided more bad news for inflation last month, driven upward by higher prices for both petroleum products and food, Tootoo.com has learned from Labor Department reports. Overall import prices rose 2.3% in May and the April increase was revised up to 2.4% following a 3.0% revised increase in March. That combined 7.9% 3-month increase was the biggest since 1990. Over the past 12 months, overall import prices have risen 17.8%, and the picture seems to be getting worse. The 3-month annualized rate of advance in the all-commodities import price index is now 30.7%, the highest in 14-years. Petroleum import prices rose 7.8% in May and were up 68.8% for the year. That was the biggest rise for petroleum import prices since an 82.5% rise for the year ending in February 2003. Excluding petroleum, May import costs were up 0.5%. However, included in that was a 1.0% rise in food costs, an impact of the world-wide increase in food prices. The 13.9% annual rise for food prices was the highest in more than 13 years. The 3-month annualized trend in the ex-petroleum category remained in double digits at 12.2%, but was down a bit from 12.6% in April. That's 'still enough inflation to fret about,' said Hall. 'Inflation is now on the lips of every trader and central banker, and the May import price data don't leave much to debate.' Even the normally lower-cost imports from China were showing the beginnings of inflation, with a 0.6 pct increase for May. That brought the annual increase to 4.6%, a record for Chinese goods since the index began in December 2003. US export prices rose 0.3% for the month, their smallest increase since last September. Agricultural exports were also up 0.3% for May but the annual 33.3% increase reflected soaring commodity prices. Export prices for non-agricultural goods rose 0.4% for the month and were up 5.7% for the year.