Year-over-year import prices moderated whilst export price inflation grew again this month.

Analyst Opinion of the Import / Export Price Situation

From the BLS:

NOTE: A problem occurred with the calculation of the U.S. export air passenger fares indexes that were released with the June 14, 2018, release of the May U.S Import and Export Price Indexes. The corrected data have been issued with this news release

The month-over-month price index for fuel imports and food exports significantly declined.

Import Oil prices were up 4.9 % month-over-month, and export agricultural prices were up 1.6 %.

• with import prices up 4.3 % year-over-year;
• and export prices up 5.3 % year-over-year;
• the markets were expecting (from Nasdaq / Econoday):

There is only a 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)

(Click on image to enlarge)

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 the strengthening of the dollar relative to other currencies.

According to the press release:

All Imports: The price index for U.S. imports fell 0.4 percent in June, after increasing 0.9 percent in May and 0.5 percent in April. The June decline was the largest monthly drop since the index decreased 0.5 percent in February 2016. Despite the downturn in June, overall import prices advanced 4.3 percent between June 2017 and June 2018.

All Exports: U.S. export prices increased 0.3 percent in June, after rising 0.6 percent the previous month. In June, higher nonagricultural prices more than offset decreasing prices for agricultural exports. Prices for overall exports advanced 5.3 percent over the past 12 months, the largest over-the-year increase since the index rose 6.3 percent in October 2011.

Month-over-Month Change - Import Prices (blue line) and Export Prices (red line)

(Click on image to enlarge)

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)

(Click on image to enlarge)

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.