By John S. McClenahen Led by a 10.3% increase in petroleum prices, the largest monthly rise since February 2003, the U.S. Labor Department's Import Price Index advanced 1.6% in May, about twice the level generally expected. May's was the eighth consecutive monthly increase in the index. From May 2003 through May 2004, U.S. petroleum import prices increased 43.9%, while prices for non-petroleum imports rose only 3%. The level of May's import price increase makes it even more likely that Chairman Alan Greenspan and the 11 other voting members of the Federal Open Market Committee (FOMC) will raise short-term interest rates when they meet at the end of this month. The influential federal funds target rate is now at 1%. It's widely anticipated the FOMC will increase the rate to 1.25%. On the export side of the ledger in May, prices for U.S. exports increased 0.3%, the smallest increase this year. Prices for nonagricultural exports rose 0.2%, their lowest in four months, while prices for agricultural exports increased 0.5%, also their smallest increase in four months.