2018.05.1321:15:00UTC+00U.S. Import Prices Increased Marginally in April

U.S. import prices slightly grew in April as a rebound in the cost of petroleum products was tempered by a decline in food prices, the latest indication that inflation pressures were increasing moderately.

According to the Labor Department, import prices rose 0.3 percent in April after falling 0.2 percent in March. The report came on the heels of data this week showing weak monthly consumer and wholesale price readings in April.

Signs of a moderate build-up of price pressures suggest the Federal Reserve will continue to gradually hike interest rates even as inflation is flirting with the U.S. central bank's 2 percent target.

The Fed's preferred inflation measure, the personal consumption expenditures price index excluding food and energy, accelerated 1.9 percent year-on-year in March after rising 1.6 percent in February.

The moderate inflation theme was also highlighted in the University of Michigan's consumer sentiment survey, which showed households' inflation expectations over the next 12 months edging up to 2.8 percent in early May from 2.7 percent in April. Their longer-term inflation expectations were unchanged at 2.5 percent.

Another survey from the Philadelphia Fed saw the core PCE price index averaging 2.0 percent in the second quarter compared to the previous forecast of 1.9 percent. Inflation was seen averaging 2.1 percent in both the third and fourth quarters.

The Fed hiked interest rates in March and has forecast at least two more hikes for this year. Following the release of the report, prices for U.S. Treasuries fell marginally while the dollar dropped against a basket of currencies.