US import prices rose more than expected in August as inflation pressures expand, according to a report from the Labor Department.
The department’s report comes after increases in both consumer and producer prices in August were reported last week.
However, analysts say that firming inflation would not stop the Federal Reserve from placing more money in the economy to support the recovery from the coronavirus recession.
The US central bank in August revised its framework, emphasizing the labor market and eliminating worries about too-high inflation.
Data showed that import prices increased by 0.9% last month as the costs of goods increased widely. Data for July became higher to reflect import prices speeding up by 1.2% instead of having 0.7% as previously recorded. According to economists asked by Reuters, import prices may rise by 0.5% in August.
In the 12 months through August, import prices dropped by 1.4% after falling by 2.8% in July.
Prices for imported fuels and lubricants increased by 3.3% after advancing 15.1% in the prior month. Petroleum prices had a 2.9% increase after rising by 16.5% in July. Imported food prices recovered with 0.4% last month after falling by 0.9% in July.
The report noted that export prices rose by 0.5% in August as increasing prices for nonagricultural products offset dropping prices for agricultural goods.
According to the private non-profit research organization National Bureau of Economic Research, the country is already in recession.
Economists and experts say a recession happens when GDP drops in back-to-back quarters, though it is the NBER that will officially make the call.
“In deciding whether to identify a recession, the committee weighs the depth of the contraction, its duration, and whether economic activity declined broadly across the economy,” the NEBR said.
According to the organization, the “unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions.”
Meanwhile, other analysts believe that there should no longer be a full lockdown of the global economy.
Suresh Tantia, a senior investment strategist at Credit Suisse’s APAC CIO office, explained that the situation is unlikely to return to its condition in March. This was when the pace of virus cases began to spread in the US and Europe, following the emergence in China last December.
However, the World Health Organization (WHO) reminds countries to continue observing health protocols to curb the spread of the coronavirus.
“The more control countries have over the virus, the more they can open up. Opening up without having control is a recipe for disaster,” WHO Director-General Tedros Adhanom Ghebreyesus said at a virtual news briefing from the United Nations headquarters in Geneva, Switzerland. “No country can just pretend the pandemic is over.”
In terms of keeping the logistics and transportation of goods safe, the Centers for Disease Control and Prevention (CDC) has released an Interim Guidance for Ships.
“Like other close-contact environments, ships may facilitate transmission of respiratory viruses from person to person through exposure to respiratory droplets or contact with contaminated surfaces,” the CDC states on its website.
Ship companies are asked to train their crew on COVID-19 prevention and mitigation, conduct COVID-19 testing (onboard or onshore), and prepare onboard isolation, quarantine, and social distancing.