The numbers: The cost of U.S. imported goods rose 0.4% in December to mark the first increase in six months, but there was little sign of intensifying inflationary pressures.
Economists polled by The Wall Street Journal had forecast a 0.8% decline.
Higher natural gas prices offset the lower cost of oil and helped account for the surprise increase.
But the cost of most other imports such as autos, consumer goods, food and industrial supplies also advanced. Import prices minus fuel rose 0.4% last month.
Big picture: The cost of imports declined sharply in the second half of 2022 owing to falling oil prices and strong dollar. Americans are paying a lot less for fuel compared to last summer and a strong dollar made imports cheaper.
The U.S. is unlikely to benefit as much in 2023, however, if oil prices creep higher as expected and the dollar continues to loses some value vs. foreign currencies.
Still, inflation is slowing in the U.S. and is likely to continue to do so.
Key details: The increase in import prices over the past year moved up to 3.5% from 2.7% in the prior month. But they are still way down from a 14-year peak of 13% last March.
Excluding fuel, the cost of imports are up an even smaller 1.9% in the past year.
Fuel prices climbed 0.6% in December, partly reversing a 3.7% drop in the prior month. Fuel prices rose 19% in the past 12 months.
Prices of U.S. exports declined 2.6% last month.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open lower in Friday trades.