December 2011 export prices declined 0.5% month-over-month while import prices declined 0.1%. The November decline in import prices is due to fuels / lubricants and foods, while the decline in export prices was driven by foods and industrial supplies.
The data is continuing to indicate that the run up in prices seen since mid-2010 is over. Exports now up only 3.6% year-over-year and imports up 8.5%.
All Imports: Import prices resumed a downward trend, declining 0.1 percent following a 0.8 percent upturn in November. The price index for overall imports rose 8.5 percent in 2011, driven by a 9.2 percent increase for the index over the first five months of the year. 2011 was the third consecutive year that import prices rose, advancing 5.3 percent and 8.6 percent, respectively in 2010 and 2009, after declining 10.1 percent in 2008.
All Exports: Prices for overall exports declined 0.5 percent in December, following a 0.1 percent advance in November and a 2.0 percent decrease in October. In December, falling prices for both agricultural exports and nonagricultural exports factored into the decrease in export prices. The price index for overall exports rose 3.6 percent in 2011 after rising 6.5 percent in 2010 and 3.4 percent in 2009.
The YoY data is now being compared to the steep inflationary cycle which began in mid-2010.
There are different rates of inflation occurring in the economy according to multiple measurements by a single agency (BLS):
- consumers (CPI) = 3.4% (November 2011)
- manufacturing / production (PPI) = 5.7% (November 2011)
- Exports = 4.7% (November 2011) & 3.6% (December 2011)
- Imports = 9.9% (November 2011) & 8.5% (December 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.