Year-over-year import price and export price inflation surged this month.

Analyst Opinion of the Import / Export Price Situation

There was a big surge in export and import prices this month lead by food and industrial supplies (which includes fuels).

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 4.9 % year-over-year..
• the markets were expecting (from Bloomberg):

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)

(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 strengthening of the dollar relative to other currencies.

According to the press release:

All Imports: Import prices increased 0.6 percent in May, continuing the upward trend that began in August 2017. The May advance followed a 0.6-percent rise the previous month. The price index for overall imports increased 4.3 percent for the year ended in May, the largest 12-month advance since the index rose 4.7 percent in February 2017. The May over-the-year advance was largely driven by higher fuel prices although nonfuel prices also increased over the past year.

All Exports: Prices for U.S. exports rose 0.6 percent for the second consecutive month in May, led by higher prices for both agricultural and nonagricultural exports. Export prices have not recorded a monthly decline since the index edged down 0.1 percent in June 2017. The price index for overall exports advanced 4.9 percent between May 2017 and May 2018, the largest 12-month 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 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.