October 2017 Import and Export Price Year-over-Year Inflation Rate Declined.

Written by Steven Hansen

Year-over-year import and export price inflation moderated.

Import Oil prices were up 4.2 % month-over-month, and export agricultural prices were up 0.1 %.

• with import prices up 2.5 % year-over-year;
• and export prices up 2.7 % year-over-year..
• the markets were expecting (from Bloomberg):

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 increased 0.2 percent in October, after rising 0.8 percent in September. The price index for all imports rose 1.6 percent over the past 3 months. Higher prices for fuel and nonfuel imports contributed to the overall rise in import prices for October. U.S. import prices increased 2.5 percent for the year ended in October.

All Exports: U.S. export prices recorded no change in October following 0.7-percent increases in September and August. The index has not recorded a decline since a 0.1-percent drop in June. Higher prices for agricultural exports were offset by lower prices for nonagricultural exports. The price index for exports advanced 2.7 percent over the past year.

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)

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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