Written by Steven Hansen
Import and export price inflation continues although the year-over-year rate of increase slowed.
Analyst Opinion of the Import / Export Price Situation
The elephant in this significant inflation remains fuel / oil and agriculture commodities. If one ignores these commodities, the year-over-year inflation rate for imports and exports is much lower. Another way to look at this data is that overall – import and export data is now inflating faster than other price indices.
Import Oil prices were down 3.8 % month-over-month, and export agricultural prices were up 0.9 %.
- with import prices down 0,5 % month-over-month, up 4.1 % year-over-year;
- and export prices up 0.2 % month-over-month, up 3.0 % year-over-year..
- the markets were expecting (from Bloomberg):
| Consensus Range | Consensus | Actual | |
| Import Prices – M/M change | -0.3 % to 0.4 % | +0.1 % | +0.5 % |
| Export Prices – M/M change | 0.0 % to 0.2 % | +0.1 % | +0.2 % |
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: Import prices rose 0.5 percent in April and have not recorded a monthly decline since the index edged down 0.1 percent in November. Prices for U.S. imports rose 4.1 percent for the year ended in April, continuing the recent trend of 12-month increases over 4.0 percent, which are the largest over-theyear advances for the index since a 5.1-percent increase in February 2012. Import prices have risen on a 12- month basis since November.
All Exports: U.S. export prices continued to rise in April, increasing 0.2 percent. Higher prices for both agricultural and nonagricultural exports contributed to the overall advance in export prices. Prices for U.S. exports rose 3.0 percent over the past 12 months following a 5.1-percent drop for the year ended April 2016.
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 usually 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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