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First Cut: Import Price Index rises along with petroleum prices in February

The Import Price Index for February was up 0.6% following a 0.1% increase in January (previously down 0.5%). A moderate rise in petroleum prices (up 4.7%) boosted the overall index. Excluding petroleum, import prices were up only 0.1% as the value of the US dollar versus a broad selection of currencies was little changed.

Prices for foods, feeds, and beverages were down 0.8% in February, while industrial supplies and materials excluding petroleum were up 0.8%.

In addition to higher petroleum costs, prices were up for coal and gas fuels (up 8.8%) and natural gas (up 10.5%).

Finished goods prices were overall not much changed. Capital goods were down 0.1%, automotive vehicles were flat, and consumer goods excluding automotive were up 0.3%.

Fed policymakers will be able to observe that prices for imported goods are not contributing much upward pressure to inflation with the Import Price Index down 1.3% compared to a year ago and even excluding petroleum off 0.5% year-over-year. However, the short-term impacts of declines in fuel prices are fading even as overall inflation looks tame.

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