Reuters reported that the cost of imported products in the United States rose for a seventh straight month in April 2011, thanks to a weaker dollar, and more owners of small businesses raised prices, in potentially worrying signs of inflation.

The Labor Department said that import costs rose 2.2% after increasing 2.6% in March 2011. While the rate of increase slowed as food and energy costs moderated, it surpassed economists' expectations for a 1.8% gain.

Another report showed high energy costs are forcing companies to raise prices even though demand is far from robust. A survey of small businesses by the National Federation of Independent Business found 12% raised prices in April 2011, up from 9% the prior month.

Economists said the rise in import prices and the number of small businesses raising prices could be a problem for Federal Reserve officials who have maintained the recent surge in commodity prices was transitory.

Mr Joseph LaVorgna, chief US economist at Deutsche Bank in New York, said that "The reality is that even at the small business level, producers are increasingly more confident in their ability to pass on costs to consumers."

Much of the increase in import prices, which were broad based, was blamed on the dollar's almost 4% depreciation against a basket of currencies in April.

Mr Chris Low, chief economist at FTN Financial in New York, said that "The Fed wanted higher inflation, but they should be careful what they wish for. Because so much of the inflation has come from dollar depreciation raising costs, it will cause the economy to slow."

(Sourced from www.reuters.com)