November 2011 export prices rose 0.1% month-over-month while import prices rose 0.7%. The November rise in import prices is due to rise in fuel costs.
However, the year-over-year price increase was lower compared to October – continuing to indicate that the run up in prices seen since mid-2010 is over. Exports now up only 6.3% year-over-year and imports up 9.9% (see graph below to understand why prices can be up month-over-month, yet fall when analyzed year-over-year).
All Imports: Import prices rose 0.7 percent in November following declines of 0.5 percent, 0.1 percent, and 0.4 percent the three previous months. The November advance is the largest monthly increase since a 2.6 percent rise in April. Overall import prices increased 9.9 percent for the year ended in November, due primarily to higher prices for the first half of the period. A 3.6 percent rise in import fuel prices drove the November increase in overall import prices.
All Exports: Export prices advanced 0.1 percent in November after a 2.1 percent drop the previous month. In November, a rise in agricultural prices more than offset falling nonagricultural prices. Overall export prices rose 4.7 percent for the November 2010-11 period, the smallest year-over-year advance since a 4.1 percent increase between August 2009 and August 2010. Agricultural prices increased 1.5 percent in November after declining 6.5 percent the previous month.
The YoY data is now being compared to the steep inflationary cycle which began in mid-2010. In other words, the rate of price increase between October and November 2010 was greater than the rate of price increase between October and November 2011.
There are different rates of inflation occurring in the economy according to multiple measurements by a single agency (BLS):
- consumers (CPI) = 3.5% (October 2011)
- manufacturing / production (PPI) = 5.9% (October 2011)
- Exports = 6.3% (October 2011) and 4.7% (November 2011)
- Imports = 10.9% (October 2011) and 9.9% (November 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 31.6% year-over-year, and has a 26.2% weight in the import index. Few consumers spend 26.2% of their income on fuel.
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.