U.S. Import Prices Saw Big Increase in January Amid Supply Chain Issues, Rising Inflation

by Victoria Santiago

Last month, U.S. import prices increased by the most in almost 11 years, amid supply chain issues and high inflation. This increase could indicate that rising inflation is here to stay, at least for the time being.

According to the Labor Department, it had gone down by 0.4% in December. However, import prices shot back up by 2% in January. That’s the biggest rise since April 2011. In the 12 months through January, prices accelerated 10.8% after rising 10.2% in December.

That 2% increase is higher than expected. Economists were polled on what they thought the import price would be, excluding tariffs. The average answer was 1.3%.

Prices Briefly Dipped in 2021, Skyrocketed During the New Year

This report came after more expensive news was released on Tuesday. In January, producer prices also increased. In fact, this is the highest they’ve been in eight months. On top of that, consumer prices also rose last month. The inflation rate has officially hit the biggest raise in 40 years.

There were signs that import prices and inflation would lower near the end of last year. Unfortunately, prices shot back up after the COVID-19 omicron variant spread throughout the globe. Prices had decreased across the board before going back up.

For example, imported fuel prices went up by 9.3% last month. That price hike comes after an 8.3% decrease in December. For petroleum, prices were up by 9.5%. Imported food had a lower price raise but still increased nonetheless. Food items had a price increase of 3.6%.

Apart from fuel and food, import prices, in general, rose by 1.1%. These “core” import prices went up by 0.6% in December. They went up by 6.2% on a year-on-year basis in January. CNBC reports that export prices also increased. Export prices went up by 2.9% last month, after a 1.6% drop in December. For agricultural exports, the price rose by 3%. The increase for nonagricultural export prices was nearly the same, at 2.9%.

The White House has promised to take steps to cool down inflation. However, the majority of people think that we’ll be dealing with high prices for quite some time.

Rising Inflation Causes Issues for Farmers

Inflation has been hurting everyone this year, including farmers. When it comes to the people that put food on our tables, they actually get impacted in a couple of different ways. For one, seeds, fuel, fertilizer, and other supplies cost more. Due to that, we as consumers get charged more for their products. However, those higher prices don’t actually mean that farmers are getting bigger profits.

Basically, it’s a hard time to be a farmer. According to Garret Hawkins, president of the Missouri Farm Bureau: “Everything we touch has increased in price.”