February 2019 Import Price Year-over-Year Inflation Now -1.3%

Written by Steven Hansen

Year-over-year import prices and export prices grew insignificantly with import prices still contracting year-over-year.

Import Oil prices were up 4.9 % month-over-month, and export agricultural prices were up 0.3 %.

• with import prices down 1.3 % year-over-year;
• and export prices up 0.6 % year-over-year..
• the markets were expecting (from Econoday):

There is only a 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 1990s, late 1990s, and mid 2000s. Import price deflation is normally associated with the strengthening of the dollar relative to other currencies.

According to the press release:

All Imports: U.S. import prices increased 0.6 percent in February, the largest monthly rise since a 0.9-percent advance in May. Despite the February increase, import prices declined 1.3 percent from February 2018 to February 2019. Both fuel and nonfuel prices contributed to the 12-month decrease. Fuel Imports: Prices for import fuel rose 4.9 percent in February, after advancing 4.1 percent in January and falling 13.3 percent in December. The February increase was the largest monthly advance since a 6.1- percent rise in May. Higher prices for both petroleum and natural gas contributed to the February increase. Petroleum prices advanced 4.7 percent in February and prices for natural gas rose 10.5 percent over the same period. Despite the February increase, fuel prices fell 6.5 percent over the past 12 months. Prices for petroleum drove the 12-month decline, falling 7.9 percent. Natural gas prices partially offset the over-theyear decline, rising 17.5 percent.

All Exports: U.S. export prices rose 0.6 percent in February following a 0.5-percent decline in January and a 0.7-percent drop in December. Higher prices for both agricultural and nonagricultural commodities contributed to the February increase. The price index for U.S. exports advanced 0.3 percent over the past 12 months driven by higher nonagricultural prices. Agricultural Exports: Export prices for agricultural commodities rose 0.3 percent in February, after falling 2.1 percent in January. Despite the February advance, overall agricultural prices fell 0.2 percent over the past 12 months. Lower prices for soybeans, meat, and nuts drove the 12-month decline

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 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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