Written by Steven Hansen
Year-over-year import price indices inflation remained in contraction and moved from a revised -1.4 % to -1.0 %.
Analyst Opinion of the Import / Export Price Situation
Note from the BLS:
U.S. import prices edged down 0.1 percent in October, the U.S. Bureau of Labor Statistics reported today, after rising 0.2 percent the previous month. The October decline was driven by lower fuel prices which more than offset higher nonfuel prices. In contrast, prices for U.S. exports increased 0.2 percent in October following a 0.6-percent advance in September.
Import Oil prices moved from a revised -5.2 % to -1.9 % month-over-month, and export agricultural prices up from a revised +2.8 % to +3.4 %.
- the markets were expecting (from Econoday):
| Consensus Range | Consensus | Actual | |
| Import Prices – M/M change | -0.2 % to 0.3 % | +0.2 % | -0.1 % |
| Import Prices – Y/Y change | -1.0 % to +0.3 % | -0.5 % | -1.0 % |
| Export Prices – M/M change | -0.1 % to 0.4 % | +0.3 % | +0.2 % |
| Export Prices – Y/Y change | -1.6 % to -1.4 % | -1.5 % | -1.6 % |
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 1990′s, late 1990′s, and mid 2000′s. Import price deflation is normally associated with the strengthening of the dollar relative to other currencies.
According to the press release:
Imports: Prices for U.S. imports fell 0.1 percent in October, the first 1-month decline for the index since a 2.6-percent drop in April. From April to September, import prices increased 4.3 percent. Despite the recent increases, prices for U.S. imports decreased 1.0 percent for the year ended in October. Import fuel prices decreased 1.9 percent in October, after a 5.2-percent drop the previous month. Lower prices for both natural gas and petroleum contributed to the October decline. Natural gas prices fell 18.1 percent in October following increases of 26.3 percent in September and 12.9 percent in August. The October decrease was the largest drop since the index fell 22.1 percent in June 2019. The price index for import petroleum declined 1.0 percent in October, after decreasing 6.8 percent the previous month. Prices for import fuel fell 27.4 percent for the year ended in October. A 29.1-percent decline in petroleum prices over the past 12 months more than offset a 20.9-percent advance in natural gas prices.
Exports: U.S. export prices increased 0.2 percent in October, continuing the upward trend of the 4 previous months. In October, the advance was driven by higher agricultural export prices; prices for nonagricultural exports were unchanged. Even with the recent increases, export prices declined 1.6 percent for the year ended in October. (See table 2.) Agricultural Exports: The price index for agricultural exports rose 3.4 percent in October, after increasing 2.8 percent in September. The October advance was the largest rise since the index increased 3.8 percent in December 2018. Higher prices for vegetables, corn, soybeans, and dairy products were the largest contributors to the October increase in agricultural prices. Agricultural export prices advanced 3.1 percent over the past year, the largest 12-month increase since January.
Month-over-Month Change – Import Prices (blue line) and Export Prices (red line)
The biggest mover of import and export prices is 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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