Import and Export Prices Deflate in September 2014

October 10th, 2014
in aa syndication, prices - ppi, cpi, etc

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Year-over-year  import price deflated this month, whilst export price growth also deflated. Both oil price indices and food declined this month, but petroleum prices were the main driver.


Follow up:

  • with import prices down 0.5% month-over-month, down 0.9% year-over-year;
  • and export prices down 0.2% month-over-month, down 0.2% year-over-year..
  • the markets were expecting:
  Consensus Range Consensus Actual
Export Prices - M/M change -0.2 % to 0.2 %  -0.1 %  -0.2%
Import Prices - M/M change -1.2 % to -0.2 %  -0.8%  -0.5%

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: Overall import prices continued a 3-month downward trend in September, falling 0.5 percent. Prices for imports decreased 1.4 percent from June to September, the largest quarterly drop since the index declined 1.4 percent during the final quarter of 2013. In September, fuel prices drove the decrease, although nonfuel prices also declined. The price index for overall imports fell 0.9 percent for the year ended in September, the largest 12-month decrease since the index fell 1.1 percent in February.

All Exports: The price index for exports declined 0.2 percent in September, which continued an overall downward trend for the index since April. In September, lower prices for both agricultural exports and nonagricultural exports contributed to the decline. Export prices decreased 0.2 percent for the year ended in September, the first 12-month decline for the index since a 0.1-percent drop in April.

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 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 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.

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