US: Import prices likely to extend gains in March - Nomura

US import prices have been rising steadily against the backdrop of continued US dollar weakness and analysts at Nomura expect this increase to have continued in March.

Key Quotes

“Excluding petroleum products, import prices showed a strong increase of 0.5% m-o-m in February. Further, imported consumer goods prices excluding autos, food and energy jumped sharply by 0.5% m-o-m. Key questions include whether and how the recent stabilization of imported goods prices will affect domestic consumer prices.”

“We think that the impact on domestic consumer prices would be only modest. On a y-o-y basis, inflation of core goods prices of CPI and PCE has been much weaker than that of corresponding import prices, suggesting domestic factors may be playing a greater role in holding down core inflation.”