Import Prices Stable, Export Prices Rise Slightly in September 2011

Although import prices are up slightly on a year-over-year basis, consumers will note very little price change since May.    Export prices while up almost 1% in the last two months, are down slightly year-over-year.

Overall, the price surges seen earlier this year have abated.

All Exports: Export prices increased 0.4 percent in September after rising a similar 0.5 percent in August,
resuming an upward trend following a 0.3 percent downturn in July. Higher prices for agricultural and
nonagricultural exports each contributed to the advance. Prices for U.S. exports rose 9.5 percent over the
past year. Despite increasing in August and September, the 12-month increase in export prices is less than
the recent peak of 10.1 percent recorded in June.

All Imports: Import prices advanced 0.3 percent in September after falling 0.2 percent the previous month.
Overall, import prices have not changed by more than 0.6 percent in any month since rising 2.6 percent in
April. Higher prices for both fuel and nonfuel imports contributed to the September advance. The price
index for overall imports increased 13.4 percent over the past 12 months, led by a sharp rise in fuel prices. A
5.5 percent advance in nonfuel prices also contributed to the overall increase.

The latest data is telling us is that IMPORTED food and oil prices are still taking a breather from their recent price run-up. Export prices are rising due to agriculture exports – HOWEVER the year-over-year comparison is showing price increases have stopped accelerating at a very high rate. Why?

The YoY data is beginning to be compared against the start of an inflationary cycle. Even with some moderate price increases in August 2011, the increases in August 2010 were more.  My graph last month shows the reason why.

There are different rates of inflation occurring in the economy according to multiple measurements by a single agency (BLS):

  • consumers (CPI) = 3.8% (August 2011)
  • manufacturing / production (PPI) = 6.5% (August 2011)
  • Exports = 9.5% (September 2011)
  • Imports = 13.4% (September 2011)

Each rate of inflation is measuring a different pulse point, and each represents the breadbasket of costs / prices relative to that grouping. It should be pointed out that fuel import prices are up over 41%, and has a 27% weight in the import index.  Few consumers spend 27% of their income on fuel.

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