12 Month Gain In Imported Food Costs Biggest On Record And Other "Transitory" Observations

And once again inflation refuses to accept it is transitory. April Import Price Index was reported up 2.2%, following a revised 2.6% increase in March (previously +2.7%). Notably, the core of the action was in petroleum and food prices. From the release: "Foods, feeds, and beverages prices advanced 1.8 percent in April after a 4.2 percent rise in March. The April increase was driven by a 22.8 percent jump in coffee prices....The price index for nonfuel industrial supplies and materials rose 1.7 percent in April following a 2.0 percent rise the previous month. Both increases were led by higher chemical and unfinished metals prices, which increased 2.4 percent and 1.7 percent, respectively, in April. The rise in chemical prices was driven by a 6.6 percent advance in plastics prices, and the largest contributors to the rise in unfinished metals prices were prices for gold and other precious metals." In a nutshell, the 12-month advance in April was the largest year-over-year increase since an 11.2 percent gain between April 2009 and April 2010.

More from Stone McCarthy:

The index for import prices has now risen more than 1.0% in each of the past seven months. The last time a similar string occurred was in the period in early 2008 when widespread gains in commodities exerted upward pressure. The BLS noted that this was the first time the index rose more than 2.0% in two consecutive months since June 2008. While price pressures remain well-contained so far, increases affect all major categories.

Fuel import prices were up 6.7% in April, continuing a string of substantial rises over the last seven months.

Nonfuel imports were up 0.6% in April. Import prices for foods advanced 1.8%, while nonfuel industrial supplies and materials rose 1.7%. In nonfuel supplies, prices were up for chemicals (+2.4%) and unfinished metals (+1.7%).

Finished goods prices were more restrained. Prices for capital goods edged up 0.1%, while those for consumer goods excluding autos rose 0.4%. Prices for autos and parts increased 0.4%.

And a follow up from Goldman:

Import & Export Prices - Weaker Dollar

MAIN POINTS:

1. US import prices rose by 2.2% mom in April, slightly more than expected. Higher prices for petroleum products contributed to the increase, as did other unfinished industrial goods (e.g. plastics and precious metals). Rising global commodity prices are the main factor behind the relatively high growth rate (+11.1% yoy) in overall US import prices.

2. However, the April report arguably also showed signs of pass-through from the weaker dollar to the prices of finished imported goods. Prices for finished non-auto consumer goods rose by 0.4% mom, vehicle prices rose by 0.4%, and finished capital goods by 0.1%. Prices for all manufactured products increased by 0.8%, and are now up 2.8% from a year earlier. Prices of imports from China rose by 0.4% mom, and have now increased for seven consecutive months

Don't forget: a margin hike a day, keeps the 15 minute inflation monster at bay.