WASHINGTON (Reuters) - U.S. import prices unexpectedly rose in October amid higher prices for fuels and other goods, the latest indication of lack of progress lowering inflation in recent months.
Import prices rebounded 0.3% last month after an unrevised 0.4% decline in September, the Labor Department's Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast import prices, which exclude tariffs, slipping 0.1%. In the 12 months through October, import prices increased 0.8% after dipping 0.1% in September.
Imported fuel prices rose 1.5% after two straight monthly declines. Food prices fell 1.6%, declining for the third consecutive month. Excluding fuels and food, import prices gained 0.4% after rising 0.3% in September. The so-called core import prices increased 2.2% year-on-year in October.
Government data week showed progress lowering inflation back to its 2% target had essentially stalled. Consumer prices increased 0.2% for a fourth straight month in October while producer prices picked up 0.2%.
That together with tariffs on imported goods expected to be unveiled by President-elect Donald Trump's incoming administration, led economists to believe that the Federal Reserve was unlikely to cut interest rates four times in 2025 as was projected by policymakers in September.
Though the U.S. central bank is widely expected to deliver a third rate cut in December, some economists say that will be a close call. Fed Chair Jerome Powell said on Thursday that "the economy is not sending any signals that we need to be in a hurry to lower rates."
The Fed embarked on its policy easing cycle with an unusually large half-percentage-point rate cut in September, its first reduction in borrowing costs since 2020. It hiked rates by 525 basis points in 2022 and 2023 to tame inflation.