Import and Export Price Deflation Continues in November 2014 - Significant Decline Again this Month

December 11th, 2014
in aa syndication, prices - ppi, cpi, etc

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Year-over-year  import prices deflated again this month, whilst export prices also significantly deflated. Oil price indices declined but food price indices slightly increased this month - there were a lot of deflation in all sections of imports and exports.

 

Follow up:

  • with import prices down 1.5% month-over-month, down 2.3% year-over-year;
  • and export prices down 1.0% month-over-month, down 1.9% year-over-year..
  • the markets were expecting:
  Consensus Range Consensus Actual
Export Prices - M/M change -1.4 % to 0.0 %  -0.2%  -1.0%
Import Prices - M/M change -2.1 % to -0.5 %  -1.7%  -1.5%


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: Prices for U.S. imports fell 1.5 percent in November, the largest monthly drop in import prices since a 2.3-percent decrease in June 2012. Led by lower fuel prices, overall import prices declined in each of the past 5 months, falling 4.2 percent over that period. The price index for imports fell 2.3 percent over the past 12 months, the largest year-over-year decline since a 2.7-percent decrease between April 2012 and April 2013.

All Exports: Export prices fell 1.0 percent in November, the largest monthly decline since a 1.0-percent drop in April. Those were the largest 1-month decreases since the index fell 1.7 percent in June 2012. In November, lower prices for nonagricultural exports more than offset higher agricultural prices. The price index for overall exports fell 1.9 percent for the November 2013-14 period, the largest 12-month drop since a 2.2-percent decline in October 2013.

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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