U.S. import prices rose at a slower pace in April as petroleum and food cost increases moderated, while a jump in wholesale inventories during March suggested a weak first quarter ended on a firmer note.
Import costs rose 2.2 percent in April, slowing from 2.6 percent increase a month earlier, according to Labor Department figures on Tuesday. Still, it was the seventh straight month of gains, and the rise surpassed forecasts for a 1.8 percent increase.
The report came on the heels of a collapse in commodity prices last week that knocked crude oil prices lower. U.S. crude costs have fallen to about $102 a barrel from more than $114 at the start of May.
The improving picture corroborates Federal Reserve officials' predictions that the recent spike in food and commodity prices would not have a lasting impact on the path of U.S. consumer prices.
If these falls were to be maintained, the rates at which import prices are increasing would slow and that would mean less upward pressure on CPI, said Paul Dales, a senior U.S. economist at Capital Economics in Toronto.
A separate report from the Commerce Department showed U.S. wholesale inventories climbing 1.1 percent. More impressively, businesses saw a sharp 2.9 percent increase in sales, more than twice the median rise projected in a Reuters poll, suggesting some parts of the economy had substantial momentum at the end of the first quarter.
U.S. gross domestic product expanded at a disappointing 1.8 percent annual rate in the first three months of 2011.
At $392.01 billion, sales were now at their highest level since June 2008, just as the U.S. credit crisis was morphing into a broader phenomenon that pushed the world economy into recession.
The inventory to sales ratio, which offers some hints of the state of demand, fell to 1.13, matching June 2008 lows.
Excluding volatile petroleum, import prices were up 0.6 percent after rising 0.4 percent the prior month. In the 12 months to April, import prices rose 11.1 percent overall and 4.3 percent excluding petroleum.
Stripping out both petroleum and food, import prices rose 0.5 percent in April after a 0.3 percent rise in March.
Fed officials have played down the potential inflationary impact from the recent spike in energy costs. The monthly rise in import prices reflected a 7.2 percent increase in imported petroleum prices, which followed a 9.8 percent advance in March.
Imported food prices increased 1.8 percent, slowing sharply from a 4.2 percent rise in March.
The Labor Department report showed export prices rose 1.1 percent after increasing 1.5 percent in March. Analysts had expected export prices to gain 0.9 percent.
In the 12 months to April, export prices rose 9.6 percent. Export prices were lifted by gains in foods and industrial supplies and materials.
(Reporting by Pedro da Costa and Lucia Mutikani)