November 2017 Import and Export Price Year-over-Year Inflation Rate Increased

Written by Steven Hansen

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

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

• with import prices up 3.1 % year-over-year;
• and export prices up 3.1 % 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 advanced 0.7 percent in November following rises of 0.1 percent in October and 0.8 percent in September. Higher fuel prices were the main contributor to the overall advance in import prices for November. The import price index increased 3.1 percent over the past 12 months. U.S. import prices have not recorded an over-the-year decline since a 0.2-percent drop in October 2016.

All Exports: The export price index rose 0.5 percent in November, after ticking up 0.1 percent in October and advancing 0.8 percent in September. In November, higher nonagricultural export prices offset lower prices for agricultural exports. U.S. export prices advanced 3.1 percent over the past 12 months and have not recorded an over-the-year decrease since the index fell 0.2 percent in November 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)

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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