© Reuters.

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. import prices increased more than expected in August and gains in the prior month were revised sharply higher, supporting the view that inflation pressures were building up.

The report from the Labor Department on Tuesday followed data last week showing further increases in both consumer and producer prices in August. Firming inflation, however, is unlikely to discourage the Federal Reserve from injecting more money into the economy to aid the recovery from the COVID-19 recession amid considerable labor market slack.

The U.S. central bank in August rewrote its framework, putting new emphasis on the labor market and less on worries about too-high inflation.

Import prices rose 0.9% last month as the costs of goods increased broadly. Data for July was revised higher to show import prices accelerating 1.2% instead of gaining 0.7% as previously reported. Economists polled by Reuters had forecast import prices, which exclude tariffs, would increase 0.5% in August.

In the 12 months through August, import prices fell 1.4% after declining 2.8% in July.

Last month, prices for imported fuels and lubricants rose 3.3% after advancing 15.1% in the prior month. Petroleum prices gained 2.9% after increasing 16.5% in July. Imported food prices rebounded 0.4% last month after dropping 0.9% in July.

Excluding fuels and food, import prices accelerated 0.7% last month after gaining 0.3% in July. The so-called core import prices shot up 0.9% in the 12 months through August.

Further gains are likely, with the dollar weakening in recent weeks against the currencies of the United States’ major trading partners.

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U.S. financial markets were little moved by the data.

The cost of goods imported from China was unchanged in August after rising 0.2% in the previous month. Prices fell 0.3% on a year-on-year basis in August.

Last month, prices for imported capital goods edged up 0.1%. The cost of imported motor vehicles ticked up 0.1%. Prices for consumer goods excluding autos rose 0.2%.

The report also showed export prices increased 0.5% in August as rising prices for nonagricultural products offset declining prices for agricultural goods. That followed a 0.9% gain in July. Export prices declined 2.8% on a year-on-year basis in August after dropping 3.8% in July.

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