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WRAPUP 1-U.S. import prices jump, mortgage demand rises

Published 01/12/2011, 08:52 AM
Updated 01/12/2011, 08:56 AM

(Adds mortgage market data)

WASHINGTON, Jan 12 (Reuters) - U.S. import prices jumped in December as energy costs surged, a sign that while inflation may be tame domestically there are plenty of price pressures coming from overseas.

Import prices rose 1.1 percent, just beneath economists' forecasts in a Reuters poll, following a revised 1.5 percent increase in November. Prices were up 4.8 percent for 2010 as a whole, according to the Labor Department data released on Wednesday.

Petroleum import prices climbed 3.9 percent, while non-petroleum costs rose just 0.4 percent.

Export prices advanced 0.7 perceNt after a 1.5 percent gain in November. They were up 6.5 percent in 2010, the highest in records dating back to 1983, and nearly double the rise seen in 2009.

A low inflation environment in the United States has allowed the Federal Reserve to mainTain a very loose monetary policy, but a recent spike in global energy and commodity prices has raised some concern that cost pressures might pick up.

One big reason for tame price growth has been the weakness in the housing market, which some economists worry will take an extended period to recover.

The latest data offered some modest encouragement, with applications for U.S. home mortgages rising as lending rates eased from recent highs.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity rose 2.2 percent in the week ended Jan. 7 to its highest level in about a month.

It had dropped on a lull in refinancing activity as influential U.S. Treasury yields soared in late 2010. Fixed 30-year mortgage rates averaged 4.78 percent in the week, down from 4.82 percent the prior week and 4.93 percent before the Christmas holiday.

The MBA's seasonally adjusted index of refinancing applications climbed 4.9 percent last week. However, even with lower rates, its gauge of loan requests for home purchases dropped 3.7 percent. (Reporting by Pedro Nicolaci da Costa; Additional reporting by Al Yoon in New York; Editing by Andrea Ricci)

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