June import prices rose 2.6%, the U.S. Labor Department announced Friday, driven higher by rising petroleum prices and a falling dollar.

Excluding the often-volatile petroleum component, June import prices increased 0.8%, the Labor Department said.

Economists surveyed by Bloomberg News had expected June import prices to rise 1.8%. Import prices also rose a revised 2.6% in May; they increased 2.8% in April, and 3.1% in March.

In the last 12 months import prices are up 20.5% -- the biggest year-over-year increase on record, the Labor Department said. It's also a level that historically indicates that U.S. consumer price inflation will trend higher, due to price pressure from foreign goods/services.

Prices for imported petroleum were a major factor in the aforementioned price rise -- up 78.6% in one year.

Meanwhile, U.S. exports prices increased 1% in June, after rising 0.4% in May. Farm export prices increased 2.2%, while non-farm exports increased 0.9%.

Economist David H. Wang said the June import/export price report was yet another negative one for the U.S economy. "The report continues to feature the impact of record-high oil prices, which are boosting inflation just about across the price spectrum," Wang said. "Import prices are making the Fed's [U.S. Federal Reserve's] job of lowering inflation harder. The U.S. needs a substantial, sustained decline in oil prices to get control of inflation."
U.S. Federal Reserve officials, economists, executives, analysts and others closely monitor changes in import and export prices because they provide reads on inflation in the U.S. and internationally. Furthermore, the data frequently has a direct impact on the bond and the currency markets.

Economic Analysis: In general, another negative import /export price report. The key stats are the continual large increase in imported oil prices and the record and inflation-feeding 20.5% year-over-year increase in import prices. It's very hard for the U.S. Federal Reserve, and for Americans, to get control of inflation/limit costs in the face of such large, sustained price increases for oil and other imported goods. Economists and analysts had hoped that oil prices would moderate in late spring/early summer, but they've continued to march higher, for a variety of factors (demand, oil as an investment, weak dollar, geopolitical issues).