A report released by the Labor Department on Tuesday showed import prices in the United States shot up by much more than expected in the month of May.
The Labor Department said import prices jumped by 1.9% in May after leaping by an upwardly revised 2.0% in April.
Economists had expected import prices to increase by 1.0% compared to the 1.9% jump originally reported for the previous month.
The report also said the annual rate of import price growth accelerated to 6.7% in May, reflecting the largest year-over-year advance since August 2022.
The bigger than expected monthly increase in import prices partly reflected a continued surge in prices for fuel imports, which spiked by 12.5% in May after soaring by 18.6% in April.
Prices for non-fuel imports also climbed by 0.8% in May after rising by 0.6% in April, reflecting higher prices for capital goods, non-fuel industrial supplies and materials, consumer goods and automotive vehicles, parts, and engines.
"Looking ahead, we expect import prices to gradually decelerate in the second half of the year as geopolitical tensions ease and global supply conditions improve," said Nationwide Financial Market Economist Vivian Chen.
"Lower energy costs should help moderate pipeline inflation pressures and reduce the risk of imported inflation feeding more broadly into consumer prices."
"However, near-term inflation pressures are likely to remain elevated as earlier war-related cost pressures continue to pass through the economy, and normalization in energy production and global logistics networks will take time," she added.
The report said export prices also shot up by 1.3% in May after spiking by an upwardly revised 3.5% in April.
Export prices were expected to jump by 1.2% compared to the 3.3% surge originally reported for the previous month.
The Labor Department also said the annual rate of export price growth accelerated to 11.2% in May, reflecting the largest year-over-year increase since August 2022.
Prices for agricultural exports shot up by 1.2% in May after surging by 1.7% in April, while prices for non-agricultural exports also jumped by 1.2% in May after spiking by 3.7% in April.
