Year-over-year import prices and export prices grew more than expected.

Analyst Opinion of the Import / Export Price Situation

Month-over-month price index for fuel imports increased (and non-fuel imports were little changed) - and the price index for agricultural commodities declined.

Import Oil prices were up 3.3 % month-over-month, and export agricultural prices were down 0.3 %.

• with import prices up 3.5 % year-over-year;
• and export prices up 3.1 % year-over-year.
• the markets were expecting (from Econoday):

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 the strengthening of the dollar relative to other currencies.

According to the press release:

All Imports: Import prices advanced 0.5 percent in October, the largest monthly increase since a 0.9-percent rise in May. Prices for U.S. imports rose 3.5 percent from October 2017 to October 2018 and have not recorded an overthe-year decrease in 2 years when the index declined 0.2 in October 2016. (See table 1.) Fuel Imports: The price index for import fuels increased 3.3 percent in October, after advancing 0.7 percent in September; the rise was the largest monthly advance since a 6.1-percent increase in May. Higher prices for both petroleum and natural gas contributed to the advance in October. Prices for petroleum increased 2.8 percent in October after rising 0.9 percent the previous month. Natural gas prices rose 24.6 percent in October, the largest monthly increase since a 25.7-percent advance in November 2017. Fuel prices increased 30.3 percent for the year ended in October, led by a 31.4-percent advance in petroleum prices. The price index for natural gas rose 24.6 percent over the past 12 months. All Imports Excluding Fuel: Nonfuel import prices advanced 0.2 percent in October, after recording no change in September. Higher prices for foods, feeds, and beverages drove the October advance and more than offset decreasing prices for capital goods; consumer goods; and nonfuel industrial supplies and materials. The price index for nonfuel imports increased 0.7 percent over the past 12 months. The over-theyear advance was driven mostly by a 3.4-percent rise in nonfuel industrial supplies and materials, as well as higher prices for consumer goods and automotive vehicles. In contrast, prices for capital goods and foods, feeds, and beverages fell over the past year.

All Exports: U.S. export prices advanced 0.4 percent in October, after recording no change in September. The October advance was the largest monthly increase since the index rose 0.7 percent in May. Higher nonagricultural prices more than offset decreasing agricultural prices. For the 12-month period ended in October, U.S. export prices advanced 3.1 percent. (See table 2.) Agricultural Exports: Agricultural export prices fell 0.3 percent in October after declining 6.1 percent over the previous 3 months. The October drop in agricultural prices was led by lower nut and cotton prices, which fell 4.6 percent and 5.3 percent, respectively. The price index for agricultural exports decreased 4.5 percent over the past year, the largest decline since the index fell 5.2 percent in May 2016. Falling prices for soybeans, nuts, and meat all contributed to the 12-month decrease. All Exports Excluding Agriculture: Prices for nonagricultural exports rose 0.5 percent in October following a 0.2-percent increase in September. Higher prices for nonagricultural industrial supplies and materials drove the October advance; rising automotive vehicles prices also contributed to the increase. In contrast, consumer goods prices fell in October. The price index for nonagricultural exports increased 3.9 percent over the past 12 months and has not recorded an over-the-year decline since the index decreased 0.2 percent in November 2016.

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)

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.