Inflation Worries

Prices of goods imported into the U.S. rose in March at the fastest pace since June 2009, led by a gain in crude oil and the biggest jump in food costs since 1994. The 2.7% increase in the import-price index followed a 1.4% rise in February, Labor Department figures showed in Washington. Economists projected a 2.1% gain, according to the median forecast in a Bloomberg News survey. Prices excluding fuel rose 0.6%.

Growth in emerging economies and a decline in the value of the dollar are leading to higher costs of commodities that Federal Reserve policy makers view as “transitory.”

Many companies are beginning to pass on some of the higher raw materials costs to consumers, while seeking ways to maintain demand.

“The weak dollar and higher oil and commodity prices continue to lift inflation,” said Sam Bullard, a senior economist at Wells Fargo Securities LLC in Charlotte, NC. “Pricing power is still limited at the manufacturing level. That said, we’re starting to see core inflation accelerate.”

Annual inflation rate projections in the Bloomberg survey of 50 economists ranged from increases of 1% to 3.9%. ◆