US import prices surge in April as fuels post biggest gain in four years

U.S. import prices surged in April, with the cost of fuels posting the largest increase in four years, another indication that the U.S.-backed war with Iran was boosting inflation.

Import prices increased 1.9% last month after an upwardly revised 0.9% rise in March, the Labor Department's Bureau of Labor Statistics said on Thursday. Economists polled by Reuters had forecast import prices, which exclude tariffs, would increase 1.0% after a previously reported 0.8% advance in March.

In the 12 months through April, import prices vaulted 4.2%. That reading was the largest year-on-year rise since October 2022, and followed a 2.3% increase in March. 

The government reported this week another solid increase in consumer prices in April, which resulted in the annual inflation rate advancing at its fastest pace in three years. Producer prices recorded their largest rise in four years in April. 

The war in the Middle East has disrupted shipping in the Strait of Hormuz, driving up prices of energy and other commodities, including fertilizer and aluminum.

Soaring inflation cemented expectations that the Federal Reserve would keep its benchmark overnight interest rate in the 3.50%-3.75% range into 2027.

Prices of imported fuel jumped 16.3% last month, the largest advance since March 2022, after rising 10.0% in March. Prices of imported food increased 0.9%. 

Excluding food and energy, import prices shot up 0.7% after gaining 0.2% in March. Prices of imported capital goods rose 1.1%, while those of consumer goods, excluding automotives, increased 0.4%. But prices of imported automotive vehicles, parts and engines dipped 0.1%.

Prices of imports from China rose 0.8%, the largest gain since July 2008. There were also strong increases in prices of imported goods from Japan, the European Union and Mexico. 

Prices of imported goods from Canada jumped 5.6%, the biggest rise in four years.

(Reporting by Lucia Mutikani; Editing by Paul Simao)