July 2019 Import Price Year-over-Year Inflation Now -1.8% Year-over-Year

Year-over-year import and export prices worsened but 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 up 1.8 % month-over-month, and export agricultural prices were up 0.4 %.​

• the markets were expecting (from Econoday):

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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)

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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:

All Imports: The price index for U.S. imports rose 0.2 percent in July, after a decrease of 1.1 percent the previous month. Prior to June, prices for U.S. imports advanced in each of the first 5 months of 2019. Despite the increases, import prices declined 1.8 percent over the past year.

All Exports: U.S. export prices increased 0.2 percent in July, after decreasing 0.9 percent over the previous 2 months. Higher agricultural and nonagricultural prices both contributed to the advance. Despite the July increase, prices for U.S. exports continued to decrease on a 12-month basis, declining 0.9 percent from July 2018 to July 2019.

Month-over-Month Change - Import Prices (blue line) and Export Prices (red line)

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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)

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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.