U.S. import prices rose sharply in May for the third consecutive month, driven by another surge in fuel costs and rising prices for capital goods and technology products tied to the artificial-intelligence investment boom.
Import prices increased 1.9 percent in May from the prior month, the Labor Department said Tuesday. That followed gains of 2.0 percent in April and 0.9 percent in March. From a year earlier, import prices were up 6.7 percent, the largest 12-month increase since August 2022.
Fuel remained the dominant source of the increase. Prices for imported fuels and lubricants rose 12.5 percent in May after climbing 18.6 percent in April. From February through May, fuel import prices jumped 47.0 percent, the largest three-month increase since the summer of 2020.
Petroleum import prices rose 13.0 percent in May and were up 48.1 percent from a year earlier. Natural-gas import prices increased 10.4 percent for the month and 35.3 percent over the year.
Oil prices have dropped dramatically in June as the U.S. and Iran moved closer to ending the war and reopening the Strait of Hormuz. On Tuesday, the price of Brent Crude fell to around $79 a barrel, down from a peak of $112 in May. That suggests subsequent import price reports will show a large decline in inflation and perhaps even deflation.
The report also showed price pressures spreading beyond energy. Import prices excluding fuel rose 0.8 percent in May and were up 3.7 percent from a year earlier, the largest 12-month increase since August 2022. Import prices excluding food and fuels rose 1.0 percent in May and 4.2 percent over the year.
Capital-goods import prices rose 1.3 percent in May and 5.6 percent from a year earlier. The Labor Department said the monthly increase was driven by higher prices for computers, peripherals and semiconductors; scientific and medical machinery; and industrial and service machinery.
A separate industry breakdown showed import prices for computer and electronic products rose 2.0 percent in May and 7.7 percent from a year earlier. That category includes many of the components and equipment used in the rapid build-out of data centers and artificial-intelligence infrastructure.
Consumer-goods import prices excluding autos rose 0.5 percent in May, the largest monthly increase since January 2024, and were up 1.7 percent from a year earlier. The increase reflected higher prices for apparel, footwear, household goods, and coins, gems, jewelry and collectibles. Automotive import prices rose 0.3 percent in May but remained 0.4 percent below their year-earlier level.
Food import prices moved in the opposite direction. Prices for imported foods, feeds and beverages fell 0.1 percent in May and were down 1.9 percent from a year earlier. Lower prices for vegetables, fruit and green coffee more than offset increases in several other food categories.
Export prices also continued to rise. Prices for U.S. exports increased 1.3 percent in May, the sixth consecutive monthly gain, after rising 3.5 percent in April. Export prices were up 11.2 percent from a year earlier, matching the largest 12-month increase since August 2022.
Nonagricultural export prices rose 1.2 percent in May and 11.8 percent from a year earlier. Prices for nonagricultural industrial supplies and materials increased 2.4 percent in May, reflecting higher prices for petroleum, chemicals and nonferrous metals.
Agricultural export prices rose 1.2 percent in May and 5.5 percent over the year, led by higher prices for dairy products and eggs, meat and vegetables.
The import-price report suggests that the recent pickup in traded-goods inflation is being powered first by energy, but with notable gains in imported technology equipment, machinery and consumer goods. Those increases could complicate the inflation picture if they persist.
The price shifts also changed the purchasing power of U.S. exports relative to imports. The Labor Department’s terms-of-trade indexes, which compare export prices with import prices for major trading partners, rose in May for China, the European Union and Mexico. That means U.S. export prices to those markets rose faster than import prices from them, improving the amount of imports U.S. exporters could buy with a given volume of exports.
The exception was Canada, where the U.S. terms of trade fell 3.7 percent as prices for imports from Canada jumped 4.9 percent, far outpacing a 0.9 percent increase in prices for U.S. exports to Canada. The terms of trade with Japan also slipped, falling 0.6 percent.