US import prices post biggest annual gain in four years

Overview

Updated 1 hour ago

US import prices rose 1.1% in September, the biggest monthly jump since May, pushing the annual gain to 8.1% — the largest since July 2022. Economists had expected a 0.6% increase.

Fuel prices drove part of the gain. But capital goods tied to the AI buildout — computers, peripherals, and semiconductors — rose for a ninth straight month, and foreign suppliers raised prices instead of absorbing US tariffs. The data excludes duties, so the full cost to American buyers is higher still.

Why it matters

Rising import costs flow into consumer prices and raise the odds the Federal Reserve keeps rates higher for longer.

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Key Indicators

1.1%

September import price increase

Monthly change, vs. 0.6% expected by economists.

8.1%

Annual import price gain

Largest 12-month increase since July 2022.

8.4%

Capital goods annual increase

Fastest pace since December 1987, driven by computers and semiconductors.

36.1%

Semiconductor import prices, year over year

Eighth straight record in data back to 2006.

Average effective US tariff rate

Up from 2.5% post-substitution rate in 2024, per Yale Budget Lab.

Voices

Curated perspectives — historical figures and your fellow readers.

Ever wondered what historical figures would say about today's headlines?

People Involved

Kevin Warsh

Federal Reserve Chairman

In office since May 2026; has given no clear signal on rate path

Donald Trump

President of the United States

Tariff policy and Middle East conflict cited for rising inflation

Dante DeAntonio

Economist, Moody's Analytics

Noted energy is not the only driver of September's jump

Organizations Involved

U.S. Bureau of Labor Statistics (BLS)

Federal statistical agency

Publishes the import and export price indexes

Collects import prices at the foreign port, before duties are applied.

Board of Governors of the Federal Reserve System

Central bank

Raised rates to 3.75%-4.00% in September; markets expect a December hike

Sets US interest rates; facing fresh inflation data that complicates its path.

Kiel Institute

Research institute

Traced tariff cost pass-through to US importers

German economic research institute that analyzed 25 million shipment records.

Yale Budget Lab

Policy research center

Tracked effective tariff rate changes

Calculated the average effective tariff rate at 9%, up from 2.5% in 2024.

Timeline

2024 October 2026

5 events Latest: 2 days ago

Tap a bar to jump to that date

October 2026
September import prices rise 1.1%, annual gain 8.1%
Latest Data

BLS reports biggest monthly jump since May and largest annual gain since July 2022.
2 days ago
September 2026
Fed raises rates to 3.75%-4.00%
Policy

Federal Reserve lifts benchmark rate by 25 basis points in September meeting.
September 2026
May 2026
Fuel import prices jump 12.12%
Data

Largest monthly fuel gain of the year so far, before three straight months of declines.
May 2026
August 2025
Last monthly import price decline
Data

Import prices post their last monthly decline; every month since has been an increase.
August 2025
2024
Effective tariff rate at 2.5%
Policy

Yale Budget Lab puts the post-substitution effective tariff rate at 2.5% before major increases.
2024

Scenarios

Fed Holds in October, Raises Rates in December

Likely Resolves by End of 2026

Discussed by: Reuters, financial market pricing

Despite September's hot inflation readings, markets expect the Fed to skip raising rates at its October meeting and tighten in December. Chairman Kevin Warsh gave no guidance in his Bangkok speech. A December hike would bring the benchmark range to 4.00%-4.25%.

AI Capital Goods Inflation Persists Through 2027

Likely Resolves by Jan 31, 2027

Discussed by: SMBC Group, TheStreet

Capital goods import prices have risen nine straight months, with semiconductor prices up 36% year over year. SMBC notes capital goods import prices have historically been a leading indicator of the PCE deflator. If the AI buildout keeps driving demand for computers, chips, and machinery, import price pressure continues regardless of near-term Fed action.

Import Price Surge Fades as Suppliers Absorb Tariffs

Unlikely Resolves by Q2 2027

Discussed by: Counter-scenario; no major analyst currently predicting this

If US demand softens and foreign suppliers need to stay competitive, they could begin absorbing tariff costs, which would show up as lower or flatter dock prices. The BLS data would then stop rising for nonfuel goods. No major analyst is forecasting this now, but it is the mechanism by which import pressure could ease.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

2021-2022

Pandemic-Era Import Price Surge (2021-2022)

Supply chain disruptions and stimulus pushed US import prices up sharply, with annual gains exceeding 10% by March 2022. The Fed initially called the inflation transitory.

Then

The Fed had to raise rates from near zero to above 5% within 18 months, triggering a slowdown.

Now

Demonstrated that import price shocks transmit to consumer prices with a lag and can force rapid policy reversals.

Why this matters now

Today's 8.1% annual import price gain approaches the 2022 peak, and the Fed faces the same question of how persistent the pressure is. The difference: this time AI investment and tariffs, not just supply chains, are the drivers.

October 1973-March 1974

1973-74 Oil Embargo

OPEC's embargo quadrupled crude oil prices, driving import costs and US consumer inflation to double digits. The Fed initially accommodated the shock, then tightened aggressively.

Then

US inflation hit 12% by 1974, followed by a sharp recession as the Fed raised rates.

Now

Established the pattern of energy shocks transmitting through import prices into broad inflation, forcing central bank tradeoffs between price stability and growth.

Why this matters now

Fuel prices are again a meaningful contributor to import price gains. But today's increase also has non-energy drivers, making the Fed's job different — and arguably harder — than in the 1970s.