Written by Steven Hansen
Year-over-year import and export price indicies remain in contraction year-over-year.
Analyst Opinion of the Import / Export Price Situation
Import prices worsened from -2.0 % to -1.8 % whilst export pricing worsened from -1.6 % to -0.9 % – and both imports and exports remain in contraction.
Import Oil prices were down 4.3 % month-over-month, and export agricultural prices were down 2.5 %
- the markets were expecting (from Econoday):
| Consensus Range | Consensus | Actual | |
| Import Prices – M/M change | -0.7 % to 0.0 % | -0.4 % | -0.5 % |
| Export Prices – M/M change | -0.5 % to 0.1 % | -0.1 % | -0.6 % |
| Import Prices – Y/Y change | -2.1 % to -1.5 % | -1.7 % | -2.0 % |
| Export Prices – Y/Y change | -1.4 % |
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: Prices for U.S. imports fell 0.5 percent in August following a 0.1-percent increase in July and a 1.1-percent decline in June. With the exception of the August and June decreases, U.S. import prices advanced in each month of 2019. Despite the increases, the price index for U.S. imports declined 2.0 percent from August 2018 to August 2019. (See table 1.) Fuel Imports: Import fuel prices decreased 4.3 percent in August, after rising 0.7 percent the previous month. Prices for import fuel fell 11.1 percent over the past 3 months. In August, lower petroleum prices more than offset higher prices for natural gas. The price index for import petroleum declined 4.8 percent, after increasing 0.9 percent the previous month. Fuel prices decreased 8.7 percent over the past 12 months; prices for import petroleum fell 9.6 percent over the same period. The price index for natural gas imports rose 16.0 percent in August, after declines in each of the previous 4 months. Despite the August increase, natural gas prices fell 6.1 percent over the past year.
All Exports: Prices for U.S. exports decreased 0.6 percent in August, after a 0.2-percent rise the previous month. The decline was driven by price decreases for both agricultural and nonagricultural exports. The price index for U.S. exports also fell on a 12-month basis in August, declining 1.4 percent from August 2018 to August 2019. (See table 2.) Agricultural Exports: The price index for agricultural exports declined 2.5 percent in August, after increases of 0.2 percent in July and 2.4 percent in June. The decrease in August was the largest monthly decline since the index fell 5.2 percent in July 2018. Lower prices for vegetables, corn, soybeans, cotton, meat, and wheat all contributed to the decline. Despite the monthly drop, prices for agricultural exports rose 0.5 percent over the past year. All Exports Excluding Agriculture: Nonagricultural export prices fell 0.4 percent in August following a 0.2-percent increase in July. The August decrease was driven by price declines for nonagricultural industrial supplies and materials and automotive vehicles. The price indexes for consumer goods and capital goods both were unchanged in August. Prices for nonagricultural exports fell 1.6 percent for the year ended in August; lower prices for nonagricultural industrial supplies and materials more than offset price increases for finished goods over the 12-month period.
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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