US Import, Export Prices Surge in October, Adding to Signs of Persistent Inflation

US Import, Export Prices Surge in October, Adding to Signs of Persistent Inflation
Cargo shipping containers at the Port of Los Angeles in San Pedro, Calif., on Oct. 15, 2021. Patrick Fallon/AFP via Getty Images
Tom Ozimek
Updated:

The prices of U.S. imports and exports surged in October, adding to signs that the current bout of inflation, which Federal Reserve policymakers and Biden administration officials say is “transitory,” could prove to be considerably more persistent.

Import prices rose 1.2 percent last month after gaining 0.4 percent in September, the Labor Department said in a Nov. 16 statement. In the 12 months through October, import prices jumped 10.7 percent, after rising 9.3 percent in September.

Fuel import prices saw an explosive rise, up 8.6 percent over the month and a whopping 86.7 percent over the year in October.

Export prices, too, saw a sharp run-up, growing 1.5 percent over the month and 18 percent over the year, with the latter being the largest 12-month increase in the history of the series, which dates back to 1983.

While the import and export price indexes reflect inflationary trends in internationally traded products, they offer insight into the broader theme of inflation, which has become a key issue for many Americans and a political problem for the Biden administration.

Republican lawmakers on the Joint Economic Committee released an analysis on Nov. 15 to illustrate that inflation is hitting lower-income families the hardest.

“Inflation is a defining piece of the post-COVID economic recovery,” said Jackie Benson, senior economist for Republicans on the Joint Economic Committee. “While much of the conversation has focused on whether today’s rising prices are transitory or permanent (it is actually a mix of both), less attention has been paid to how inflation is affecting our economic recovery and American families’ livelihoods.

“Unfortunately, the data show that surging prices of everyday items like food, gas, and housing disproportionately affect poor and middle-class Americans,” Benson added.

The report comes as Republicans remain opposed to Democrats’ plans for President Joe Biden’s “Build Back Better” climate and social spending package, warning it could fuel further price hikes.

“Inflation is at a 30-year high, yet the Biden administration and Congressional Democrats want to blow past all the warning signs and pour trillions more into government programs,” Sen. John Boozman (R-Ark.) said on Twitter.

“Our economy, and American families, will continue to suffer under this reckless tax-and-spend agenda,” Boozman wrote. “Build Back Better will make inflation worse.”

Biden administration officials disagree, arguing that the spending packages will have an anti-inflationary impact.

White House press secretary Jen Psaki told reporters at a recent briefing that “economists across the board” agree that Biden’s infrastructure bill and his Build Back Better agenda “will ease inflationary pressure over the long term.”
Her remarks on the claimed anti-inflationary impact of the Democrats’ spending agenda echo comments made by Biden on Nov. 10, the day the Labor Department released data showing the over-the-year inflation rate in October came in at 6.2 percent, the highest level since 1990.

Biden said “17 Nobel Prize winners in economics have said that my plan will ‘ease inflationary pressures,'” arguing that the recently passed infrastructure bill would reduce supply-side bottlenecks and “make goods more available and less costly.”

The president was presumably referring to an open letter (pdf) signed by more than a dozen Nobel laureates backing his economic agenda, arguing that “it will ease longer-term inflationary pressures” because “it invests in long-term economic capacity and will enhance the ability of more Americans to participate productively in the economy.”

Psaki, in the Nov. 12 briefing, accused Republicans of “screaming about inflation” and using the issue as a “political cudgel,” while being uncooperative in searching for a solution to the problem, which she argued should come in the form of backing Biden’s big-ticket spending plans.

Tom Ozimek
Tom Ozimek
Reporter
Tom Ozimek is a senior reporter for The Epoch Times. He has a broad background in journalism, deposit insurance, marketing and communications, and adult education.
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