US import prices surged in September, marking the largest annual increase in over four years. The Labor Department reported a 1.1% rise in import prices last month, driven by higher costs for energy products and a variety of other goods. Economists had anticipated a smaller 0.8% increase, highlighting the persistent inflation pressures fueled by the ongoing Middle East conflict. Over the 12 months through September, import prices climbed 8.1%, the steepest gain since July 2022.
The report follows recent data showing strong increases in consumer and producer prices, reinforcing concerns that inflation is spreading beyond the energy sector. The prolonged US-Israeli conflict with Iran has disrupted supply chains, keeping oil prices elevated. Economists have linked rising inflation to President Donald Trump’s policies, including tariffs on imports and the Middle East conflict. A recent poll found that 78% of Americans blame Trump’s policies for the rising cost of living.
Imported fuel prices rebounded 4.8% in September, while food prices remained unchanged. Excluding food and fuels, import prices advanced 0.7%, matching the prior month’s increase. Capital goods prices rose 0.9%, boosted by higher costs for computers, peripherals, and semiconductors. Prices for imported consumer goods, excluding automotives, increased 0.4%, driven by a 0.7% surge in long-lasting manufactured goods.
Despite the inflationary pressures, financial markets still expect the Federal Reserve to skip a rate hike later this month and tighten monetary policy in December. The US central bank raised its benchmark interest rate to the 3.75%-4.00% range in September. The report also showed a 12.6% surge in import air passenger fares, which could impact economists’ estimates of the Personal Consumption Expenditures price index, a key inflation measure tracked by the Federal Reserve.