July 2017 Import And Export Price Year-Over-Year Inflation About The Same
Import and export price inflation continues with import prices unchanged year-over-year, whilst export prices were up marginally.
Analyst Opinion of the Import / Export Price Situation
The elephant in this month's changes were fuel / oil and agriculture commodities. If one ignores these commodities, the year-over-year inflation rate for imports declined and exports were much lower.
Import Oil prices were up 0.5 % month-over-month, and export agricultural prices were up 2.1 %.
- with import prices up 0.1 % month-over-month, up 1.5 % year-over-year;
- and export prices up 0.4 % month-over-month, up 0.8 % year-over-year..
- the markets were expecting (from Bloomberg):
Consensus Range | Consensus | Actual | |
Import Prices - M/M change | -0.1 % to 0.2 % | +0.2 % | +0.1 % |
Export Prices - M/M change | 0.0 % to 0.3 % | +0.2 % | +0.4 % |
There is only marginal correlation between economic activity, recessions, and export/import prices. Prices can be rising or falling going into a recession or entering a period of expansion. Econintersect follows this data series to adjust economic activity for the effects of inflation where there are clear relationships.
Econintersect follows this series to adjust data for inflation.
Year-over-Year Change - Import Prices (blue line) and Export Prices (red line)
There are three cases of deflation outside of a recession - early 1990′s, late 1990′s, and mid 2000′s. Import price deflation is normally associated with strengthening of the dollar relative to other currencies.
According to the press release:
All Imports: Import prices advanced 0.1 percent in July, after a 0.2-percent decrease in June and a 0.1- percent drop in May. The price index for U.S. imports rose over the past year, increasing 1.5 percent. Prices for U.S. imports have risen on an over-the-year basis for 9 consecutive months; the last decrease was a 0.2- percent drop in October 2016.
All Exports: The price index for U.S. exports advanced 0.4 percent in July, matching a 0.4-percent rise in December 2016. The increases are the largest monthly advances since a 0.8-percent rise in June 2016. Rising prices for both agricultural and nonagricultural exports contributed to the July increase. Prices for U.S. exports rose 0.8 percent over the past year, continuing an upward trend; U.S. export prices have not recorded an over-the-year decrease since falling 0.2 percent in November 2016.
How moderate the price "increases" have been over the past year is obvious from the graphic below.
Month-over-Month Change - Import Prices (blue line) and Export Prices (red line)
The biggest mover of import and export prices are usually oil (imports) and agricultural products (exports).
Oil Import Price Change Month-over-Month (blue line) and Agriculture Export Change Month-over-Month (red line)
Export / Import prices are the first inflation numbers reported each month.
Caveats on the Use of the Export/Import Price Index
Both import and export prices index values shown in this post is a weighted average for the entire category of exports or imports. The BLS has many sub-categories relating to a particular commodity or goods. Econintersect using spot checks believes these subindexes are accurate.
Disclosure: None.