Import prices post biggest fall in five months

WASHINGTON, Wed Dec 12, 2012 — Import prices recorded the biggest drop in five months in November as food and fuel costs tumbled, keeping inflation pressures subdued against the backdrop of weak economic activity.

Overall import prices fell 0.9 percent, the Labor Department said on Wednesday. October’s data was revised to show a 0.3 percent increase rather than the previously reported 0.5 percent gain.

Economists polled by Reuters had expected prices to fall 0.5 percent last month. In the 12 months to November, import prices fell 1.2 percent.

Stripping out fuels and food prices, import prices dipped 0.1 percent as the costs of capital goods fell by the most since March 2010 and automobile prices were flat, indicating that broader inflation pressures remained benign.

The tame inflation environment should allow the Federal Reserve to stay on its ultra-easy monetary policy course as it tries to nurse the economy back to health.

Officials at the U.S. central bank resume policy deliberations on Wednesday and are expected to reaffirm the Fed’s accommodative stance at the end of the two-day meeting.

Last month, imported petroleum prices fell 3.6 percent after slipping 0.2 percent in October. The price of imported natural gas surged 18.2 percent, the largest increase in three years. Imported food prices fell 1.3 percent, the biggest decline since February 2012, after edging up 0.2 percent the prior month.

Elsewhere, imported capital goods prices fell 0.3 percent after being flat in October.

Housing market recovery gains traction with rising sales, prices

WASHINGTON, Wed May 23, 2012 – The U.S. spring home-selling season got off to a strong start in April with rising sales and prices providing evidence that a housing market recovery was gaining some traction.

The housing sector has been the Achilles’ heel of the economy ever since the home-price bubble burst.

Data this week, however, have painted a relatively upbeat picture for the market and underscored the economy’s resilience.

“The recent buoyancy in housing market activity has raised hopes that this beleaguered sector may finally be on the verge of a rebound,” said Millan Mulraine, senior macro strategist at TD Securities in New York.

New home sales increased 3.3 percent to a seasonally adjusted 343,000-unit annual rate, the Commerce Department said on Wednesday. Compared to April last year, sales were up 9.9 percent.

The report came on the heels of news on Tuesday that home resales hit a two-year high, with the sector getting support from investors who are increasingly seeing value.

Even more encouraging, the median price for both new and previously owned homes surged last month, a further sign of life for a market that has struggled to come back from its 2006 collapse.

The improving tone could be a boon for President Barack Obama whose housing policies have been decried for doing too little to help distressed homeowners.

Mattel raises toy prices to fight higher costs

EL SEGUNDO, Calif. – Prices of Mattel Inc. toys like Barbie dolls and Hot Wheels cars have gone up as the company tries to compensate for increasing costs for materials such as resin and rising wages in China.

The world’s largest toy company, which sees input, labor and transportation costs rising in 2012, said on Tuesday that it had raised prices at a mid-single-digit rate on January 1 with the goal of keeping gross margins at around 50 percent.

The news came on the same day Mattel reported a higher-than-expected quarterly profit, sending its shares to their highest level since 1998.

“Nobody likes to take prices up,” said CEO Bryan Stockton. “Having said that, we’re all seeing the same kind of commodity increases, whether it’s in transportation costs, labor etc. So I think generally there is an understanding of the situation across the board.”

Stockton replaced long-time CEO Robert Eckert at the end of last year.

Mattel also set a first-quarter cash dividend of 31 cents a share, reflecting an annual payout of $1.24. That represents a 35 percent increase from last year.

While tight cost controls did boost the company’s profit in the fourth quarter, a stronger dollar and weakness in its Fisher-Price business hurt revenue in the period covering the Christmas selling season.

This year will be another when consumers and retailers will be “a little cautious,” Stockton said on Tuesday.

December producer prices fall 0.1 percent, DOL report says

WASHINGTON ― Producer prices fell in December as companies paid less for gasoline and vegetables, although higher prices for light motor trucks pushed a measure of underlying inflation higher.

The Labor Department said on Wednesday its seasonally adjusted index for prices received by farms, factories and refineries fell 0.1 percent.

Economists polled by Reuters had expected wholesale prices to increase 0.1 percent.

Excluding volatile food and energy, core producer prices rose 0.3 percent last month, the biggest rise since July. That was above economists’ expectations for a 0.1 percent gain.

The data appears to send mixed messages about inflation pressures in the U.S. economy.

A drop in energy prices has encouraged Wall Street and the U.S. Federal Reserve to forecast inflation will cool in coming months. Energy costs for businesses fell 0.8 percent last month, with gasoline down 2.3 percent. Food prices fell 0.8 percent.

At the same time, higher core prices – if eventually passed on to consumers by businesses – might make the U.S. central bank more cautious about taking additional steps to help the still-struggling U.S. economy.

That said, about 30 percent of the gain in core prices were due to an increase in prices for light motor trucks, the Labor Department said.

Prices in auto sector have been affected in recent months by floods in Thailand that last year disrupted supply chains. Prices for light trucks rose 0.9 percent last month, the biggest rise since July.