Reuters: Money: Petroleum cost boosts import prices in February, food prices drop

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Petroleum cost boosts import prices in February, food prices drop Mar 14th 2012, 13:57 1 of 4. People talk with a job recruiter (R) while they attend the ''JobEXPO'' job fair in New York, January 25, 2012. Credit: Reuters/Eduardo Munoz WASHINGTON | Wed Mar 14, 2012 9:57am EDT WASHINGTON (Reuters) - Import prices rose in February on sharply higher petroleum costs, but there were little signs of underlying imported inflation pressures as food prices posted their largest decline in three years. Overall import prices rose 0.4 percent, the Labor Department said on Wednesday. January's data was revised to show a flat reading instead of the previously reported 0.3 percent increase. Economists polled by Reuters had expected prices to rise 0.6 percent last month. The dollar fell 1.7 percent on a trade-weighted basis in February and likely contributed to the rise in the cost of imports. The Federal Reserve on Tuesday said the recent steep run-up in oil and gasoline prices would push inflation up, but only temporarily. Long-term inflation expectations remained stable, the central bank said. Stripping out petroleum, import prices dropped 0.2 percent, pointing to benign inflation pressures - after being flat in January. Data on Thursday is expected to show that energy pushed producer prices up 0.5 percent last month, according to a Reuters survey, after edging up 0.1 percent in January. Outside food and energy, wholesale prices are expected to have moderated, with a gain of 0.2 percent forecast after a 0.4 percent increase in January. Last month, imported petroleum prices increased 1.8 percent after gaining 0.3 percent in January. Imported food prices fell 3.0 percent in February - the biggest decline since February 2009 - reversing January's 2.3 percent increase. Elsewhere, imported capital goods prices edged down 0.1 percent after advancing 0.4 percent in January. Imported motor vehicle prices were flat after rising 0.4 percent in January. The Labor Department report also showed export prices rose 0.4 percent last month, above analysts' expectations for a 0.2 percent gain. Export prices increased 0.2 percent in January. In a separate report, the Commerce Department said the U.S. current account deficit widened to $124.1 billion in the fourth quarter of 2011, as imports rose and exports dropped. The current account deficit, which measures the flow of goods, services and investments into and out of the United States, rose to 3.24 percent of gross domestic product from 2.84 percent in the third quarter. For all of 2011 the current account gap was 3.1 percent of GDP, down slightly from 3.2 percent in 2010. Analysts polled by Reuters had expected the current account gap to widen to $114.2 billion. A third report showed demand for U.S. home purchases rose for the third week in a row last week, though applications for refinancing sagged and pulled a gauge of overall mortgage finance activity lower. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity fell 2.4 percent last week. Economists are hopeful the housing sector will no longer drag on the economy this year, although sales and construction activity remain at depressed levels. (Reporting By Lucia Mutikani and Doug Palmer; Editing by Neil Stempleman) Link this Share this Digg this Email Reprints

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