Economic Report: Import prices jump 10.9% in the past year, adding to high U.S. inflation

The numbers: The cost of imported goods such as oil, grains and autos jumped 1.4% in February and continued to feed into the hottest U.S. inflation in four decades.

Economists polled by The Wall Street Journal had forecast a 1.6% advance.

Import prices also surged 1.9% in the prior month. The back-to-back increases in import prices are the largest in 11 years.

Key details: The cost of oil climbed 8.1% in February and accounted for much of the increase in import prices.

Oil began to surge last year from pandemic lows and prices spiked toward the end of the month after Russia invaded Ukraine.

The good news? Oil prices have tumbled in mid-March after soaring to as high as $130 a barrel. The price has since plummeted to under $100 and is not far from pre-war levels.

Import prices minus fuel rose 0.8% last month.

Over the past year, overall import prices have climbed 10.9%.

Export prices jumped 3% in February — the largest on record — and are up 16.6% in the past year.

Big picture: Inflation is likely to remain high through the spring, especially after the Russian attack on Ukraine drove up the prices of oil, wheat and other commodities.

The Federal Reserve later today is expected to announce the first increase in U.S. interest rates in four years.

The central bank has kept its benchmark short-term rate near zero during the pandemic to try to safeguard the economy, but easy money has contributed to the surge in inflation. The Fed is now unwinding its strategy to cool off inflation.

Market reaction: The Dow Jones Industrial Average

and S&P 500

were set to open higher in Wednesday trades. Stocks rose on Tuesday after oil prices fell and one measure of U.S. inflation showed a surprisingly small increase.

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