US import prices post biggest annual jump since 2022
U.S. import prices rose 1.1% in September and 8.1% from a year earlier, the largest annual gain since July 2022, adding to evidence that inflation is spreading beyond energy ahead of the Fed's meeting.
September import prices rose 1.1%, the Bureau of Labor Statistics said on Friday, Oct. 16, beating the 0.8% gain economists polled by Reuters had expected. Over 12 months, prices of goods coming into the U.S. climbed 8.1%, the largest annual advance since July 2022, after a 6.7% rise in August.
What happened
Energy did the heavy lifting. Import fuel prices jumped 4.8% in the month and 34.5% over the year, with petroleum up 35.4% and natural gas up 96.5% annually, according to the BLS release. The natural gas gain was the largest since June 2022.
Nonfuel prices rose 0.7% and have not fallen on a monthly basis since August 2025. They are up 6.0% from a year earlier, the biggest increase since April 2022. Capital goods rose 0.9% for a second straight month, helped by computers, peripherals and semiconductors amid the AI investment boom.
Prices of imports from China rose 0.7%, the most since December 2021. Import air passenger fares surged 12.6%, though economists said the version used in the Fed's preferred inflation gauge was unchanged after seasonal adjustment, Reuters reported. Export prices rose 2.2% in the month and 11.6% over the year.
Elsewhere, import prices from Canada rose 1.3%, from Mexico 0.6%, from Japan 0.6% and from the European Union 0.3%. Nonfuel industrial supplies and materials gained 1.4%, while food, feed and beverage prices were unchanged. Agricultural export prices jumped 2.6%, the largest monthly increase since November 2022, on soybeans, corn and wheat.
On the export side, nonagricultural industrial supplies and materials rose 4.0% on higher petroleum, natural gas and chemical prices. The U.S. terms of trade index with the European Union jumped 3.6%, the largest one-month gain since monthly percent changes were first published in January 2018.
Why it matters
The report completes a hot week of data. It followed September CPI at 3.7% and a 6.3% annual jump in producer prices, which left economists convinced inflation was broadening beyond energy. Import prices exclude tariffs, so the increase does not include duties paid at the border.
Excluding food and fuels, September import prices rose 0.7% and 6.2% over the year. Economists' estimates for September core PCE inflation clustered between 0.31% and 0.36%, which could round up to 0.4% and lift the annual rate to 3.1%, Reuters said.
The political mood is sour. A Reuters/Ipsos poll found about 78% of Americans blamed President Donald Trump's policies for the rising cost of living. Economists cited by Reuters pointed to tariffs, a trade war with Canada and the Middle East conflict, which has snarled supply chains and kept oil prices high.
Markets took it calmly. Treasury yields fell on the day, and the 10-year closed the week at 5.09%, down 15 basis points, according to Treasury data compiled by Capital Finance Bureau. Investors still expected the Fed to skip a hike this month and tighten in December.
What's next
The Fed meets on Oct. 27-28. Factory output rose 0.3% in September, a separate Fed report showed, but grew at only a 0.7% annualized pace in the third quarter.
The BLS will publish October import and export prices on Nov. 17. Another month like September import prices would make it harder for the Fed to argue the energy shock is not feeding through to the wider economy.
This article is for information only and is not investment advice.