Oil pushes U.S. import prices higher, threatens consumers

The rising cost of oil pushed U.S. import prices higher in January, posing an additional threat to consumer spending, which is already under pressure due to higher taxes.

Overall import prices rose 0.6 percent last month, the first increase in three months and a tenth of a percentage point below the consensus forecast in a Reuters poll, Labor Department data showed on Wednesday.

Even with the increase, inflation pressures are seen as muted, and the Federal Reserve is expected to continue its bond buying program well into this year in a bid to boost employment.

The cost of oil drove much of the overall increase. Import prices for petroleum rose 2.9 percent, the biggest increase since September.

The sting at the pump could lead consumers to spend less on other goods, dragging on economic growth. Consumers already are feeling the pinch from higher tax rates that took effect in January.

Export prices rose a modest 0.3 percent in January. Non-agricultural prices were up 0.5 percent in the month, and were flat in the 12 months through January.

U.S. manufacturers selling their goods abroad appear to have declining power in pricing as the global economy takes a hit from the European debt crisis. (Reporting by Jason Lange; Editing by Neil Stempleman)

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