U.S. import prices in March surpassed market estimates as food prices grew by their largest margin in three years.
The Labor Department announced today that import prices rose 0.6 percent in March after rising 0.9 percent in February. This exceeded the median forecast of a 0.2 percent increase over the period in a Reuters survey of economists.
In the past year ending March, import prices plunged 0.6 percent, indicating imported inflation is still weak, helping keep domestic inflation under check. The apparently low inflationary pressures on the U.S. economy may indicate that the Federal Reserve will retain its current monetary policy for some time, despite the fact that the labor market is starting to look up.
The U.S. central bank reduced overnight interest rates to their lowest point of zero to 0.25 percent in December 2008 in the aftermath of the global financial recession, and said it will retain them until the economy recovers.
The Federal Reserve has been gradually tapering the amount of money it uses to buy assets every month. It released the minutes of its policy meeting held on March 18-19 yesterday that hinted that interest rate hikes are not imminent anytime soon.
In March, import food prices surged 3.7 percent, their strongest advance since March 2011, up from a decline of 0.7 percent the previous month. Imported fuel prices jumped 1.2 percent in March, which was less than the gain of 5.3 percent in February, according to the Labor Department.
Import prices figures adjusted for fuels and foods grew 0.2 percent, up from a decline of 0.1 percent in February. Export prices rose 0.8 percent in March, the biggest advance since September 2012, after earlier rising 0.7 percent the previous month. The export prices also rose 0.2 percent in the year ending on March.
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