US import prices rise marginally in June

U.S. import prices rebounded marginally in June amid cheaper energy products, but higher costs for consumer goods were consistent with a tariff-driven increase in inflation.

Import prices increased 0.1% last month after a downwardly revised 0.4% decline in May, the Labor Department's Bureau of Labor Statistics said on Thursday. Economists polled by Reuters had forecast import prices, which exclude tariffs, would rise 0.3% after a previously reported unchanged reading in May.

In the 12 months through June, import prices fell 0.2%, matching May's decrease.

Data this week showed solid price increases in tariff-sensitive goods in June both at the consumer and producer level, indicating that President Donald Trump's sweeping tariffs on imports announced in April were now lifting inflation.

Trump last week announced higher duties would come into effect on August 1 for imports from a range of countries, including Mexico, Japan, Canada and Brazil, and the European Union. Economists expect these tariffs will keep goods prices elevated through the end of this year.

Imported fuel prices fell 0.7% in June after dropping 5.0% in May. Food prices declined 0.8% after easing 0.7% in the prior month. Excluding fuels and food, import prices rose 0.2%. The so-called core import prices gained 0.1% in May. In the 12 months through June, they increased 1.0%.

Prices for imported consumer goods excluding motor vehicles jumped 0.4% last month after dropping 0.3% in May. Imported capital goods prices were unchanged while those for motor vehicles, parts and engines slipped 0.1%. 

Though core import prices rose moderately last month, a depreciating dollar poses an upside risk to inflation. The trade-weighted dollar is down about 7.1% this year.

"Since the Trump administration began imposing tariffs, the dollar has depreciated, which could lead to a larger pass-through from tariffs to consumer prices," said Michael Pearce, deputy chief U.S. economist at Oxford Economics. 

"A weaker dollar boosts the likelihood that firms pass on a larger share of tariffs."