Hmm , folks thinking the Fed can engage in further QE in the face of rising import prices without further increasing price inflation , should think again....

http://www.zerohedge.com/news/import-prices-surge-most-april-2011

Import Prices Surge Most Since April 2011

Submitted by Tyler Durden on 04/11/2012 08:45 -0400

• BLS
 
• Bureau of Labor Statistics
 
• Crude
 
• Natural Gas

Today's import price update from the BLS was another warning red flag of margin compression for local manufacturers, as import prices, across both fuel and nonfuel imports, soared by 1.3%, well above consensus of a 0.8% rise, compared to the revised February decline of -0.1%. There is likely much more pain in store as the 3.8% increase in fuel import prices in March was a fraction of the 9.7% and 7.6% recorded in March and April in 2011 when crude and gasoline were trading at current levels. In other words, foreign makers can still absorb costs domestically before passing it on to the US. We expect this will change quickly, and the April fuel import prices will soar far more than even in March. As for the bottom line that the Fed does track, nonfuel imports, it rose 0.5%, also the most since April 2011. By all appearances, this means that the market will have to seriously tumble for the Fed to proceed with more easing at this moment, although ease it will. It is only a matter of time: about $30 trillion in excess debt demand it, and $2 trillion in Treasury debt/year needs to be monetized somehow.

From the report:

U.S. import prices advanced 1.3 percent in March, the U.S. Bureau of Labor Statistics reported today, after edging down 0.1 percent the previous month. Higher fuel and nonfuel prices contributed to the advance. Prices for U.S. exports rose 0.8 percent in March, following increases of 0.4 percent in February and 0.2 percent in January.

Imports

All Imports: Import prices advanced 1.3 percent in March, the first increase for the index since rising 0.7 percent in November and the largest monthly rise since a 2.6 percent advance in April 2011. Import prices increased 3.4 percent over the past year, the smallest 12-month advance for the index since a similar 3.4 percent rise between November 2008 and November 2009.

Fuel Imports: A 3.8 percent rise in import fuel prices led the March increase in overall import prices.  The increase in fuel prices was the first one-month advance since a 3.4 percent rise in November. In March, a 4.3 percent increase in petroleum prices, the largest component of imported fuels more than offset a 14.2 percent drop in natural gas prices. Prices for import fuel rose 7.4 percent for the year ended in March, driven by a 9.6 percent advance in petroleum prices. In contrast, natural gas prices fell 37.8 percent over the past 12 months.    

All Imports Excluding Fuel: The price index for nonfuel imports increased 0.5 percent in March, the largest one-month advance since a 0.8 percent rise in April 2011. A 1.7 percent increase in nonfuel industrial supplies and materials prices was the largest contributor to the overall advance, while prices for foods, feeds, and beverages; capital goods; and automotive vehicles rose as well. Nonfuel import prices increased 2.0 percent for the March 2011-12 period, the smallest year-over-year advance since a 1.9 percent rise for the year ended in February 2010.

And visually: