U.S. import prices in May saw the largest year-on-year increase in nearly four years, as the AI boom and conflicts in the Middle East pushed up inflationary pressures.

In May, the import prices in the United States continued to rise significantly, indicating the rise in energy costs due to the conflict in the Middle East and the data center construction boom driven by Artificial Intelligence (AI), which is continuing to transmit inflationary pressure to the U.S. economy. Data released by the U.S. Bureau of Labor Statistics on Tuesday showed that the import price index in May rose by 1.9% from the previous month, unchanged from the revised increase in April. On a year-on-year basis, import prices rose by 6.7%, the largest increase in nearly four years. Specifically, plastic raw materials, computer equipment, and international air transport prices were the main factors driving the increase in import costs. The data shows that in May, the price of imported plastic raw materials surged by 6.5% month-on-month, one of the largest monthly increases on record. Since plastic products are widely used in packaging, household appliances, automobiles, and everyday consumer goods manufacturing, and their raw materials are highly dependent on petrochemical products, the rise in energy prices is gradually spreading through the industry chain to a wider range of consumer sectors. At the same time, there has been a significant increase in the price of imported air passenger fares. This project is considered one of the inflation indicators that the Federal Reserve is closely monitoring, directly affecting its preferred measure of inflation, the Personal Consumption Expenditure (PCE) Price Index. Of note, the surge in demand brought by the AI industry is also pushing up the prices of some imported goods. The data shows that in May, the prices of imported computers, peripherals, and semiconductor products rose by 3.6% month-on-month, the second largest monthly increase since relevant statistics have been available since 1994. As global AI infrastructure construction enters its peak period, the continuous construction of large-scale data centers is driving up the demand for servers, chips, and related electronic devices. Meanwhile, chips are widely used in consumer products such as smartphones, personal computers, and automobiles. The cost pressure brought by the AI boom is gradually spreading from high-end manufacturing to a wider range of sectors. This data is also the latest evidence of the expanding effects of war inflation in recent weeks. Previously released data shows that consumer prices and producer prices in the United States have accelerated significantly in recent months, indicating that inflationary pressures have gradually spread from the initial rise in energy prices to more goods and services sectors. However, with the United States and Iran expected to sign a temporary peace agreement this coming Friday, expectations for the recovery of energy supply have significantly increased. As a result, international oil prices have recently plummeted, while U.S. stocks have continued to rise. Most economists believe that the peak of inflation triggered by the war may have passed, but due to the lag effects of supply chain transmission, prices of some goods and services may continue to rise in the coming months. For the Federal Reserve, the continued rise in import prices undoubtedly increases the difficulty of controlling inflation. The market generally expects the Federal Reserve to maintain interest rates at this week's meeting. However, with inflationary pressures persistently higher than expected, traders are already starting to bet that the Federal Reserve may restart rate hikes before the end of the year.