March 2021 Import Year-over-Year Inflation Grows To +6.9%

Written by Steven Hansen

Year-over-year import price indices inflation grew from +1.4 % to +3.0 %.

Import Oil prices moved from a revised +11.7 % to +6.3 % month-over-month, and export agricultural prices up from +2.8 % to +2.4 %

• 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 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: U.S. import prices advanced 1.2 percent in March, 1.3 percent in February, and 1.4 percent in January; the 4.1-percent increase from December to March was the largest 3-month rise for import prices since the index advanced 5.8 percent in May 2011. The price index for U.S. imports increased 6.9 percent from March 2020 to March 2021, the largest over-the-year advance in the index since a 6.9-percent rise for the year ended January 2012. Import fuel prices rose 6.3 percent in March, after increases of 11.7 percent in February, 8.4 percent in January, and 7.3 percent in December. The increases over the past 4 months were mostly driven by higher petroleum prices. Prices for import petroleum advanced 6.7 percent in March following a 32.3- percent rise from November to February. The price index for natural gas also increased in March, advancing 3.6 percent following an 18.0-percent increase the previous month. Import fuel prices rose 54.3 percent for the year ended in March, the largest 12-month advance for the index since a 68.9-percent increase in February 2017. The price indexes for petroleum and natural gas also rose on a 12-month basis in March, increasing 53.9 percent and 91.0 percent, respectively.

Exports: Prices for U.S. exports increased 2.1 percent in March, after rising 1.6 percent in February and 2.6 percent in January. The 6.5-percent advance from December to March was the largest 3-month increase since the index was first published in September 1983. In March, higher prices for agricultural and nonagricultural exports both contributed to the advance in export prices. The price index for U.S. exports rose 9.1 percent from March 2020 to March 2021, the largest over-the-year increase since a 9.4-percent advance in September 2011. (See table 2.) Agricultural Exports: Agricultural export prices rose 2.4 percent in March following increases of 2.8 percent in February and 6.0 percent in January. The March advance was driven by higher prices for meat, soybeans, fruit, and cotton. Prices for agricultural exports advanced 20.5 percent over the past 12 months, the largest over-the-year rise since the index increased 22.7 percent in September 2011. The 12-month increase was primarily driven by rising prices for soybeans, corn, meat, and fruit.

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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