November 2020 Import Year-Over-Year Inflation Unchanged At -1.0%

Year-over-year import price indices inflation remained in contraction and remains at -1.0 %.

Analyst Opinion of the Import / Export Price Situation

Per the BLS:

Prices for U.S. imports ticked up 0.1 percent in November, the U.S. Bureau of Labor Statistics reported today, after edging down 0.1 percent in October. Higher fuel prices in November more than offset lower nonfuel prices. U.S. export prices also rose in November, increasing 0.6 percent following advances of 0.2 percent in October and 0.6 percent in September.

Note that:

Coronavirus (COVID-19) Pandemic Impact on November 2020 Import and Export Price Index Data The Bureau of Labor Statistics did not make changes to either the collection method or estimation methodology for the November release of U.S. Import and Export Price Indexes. Survey response rates for November were 5.6-percentage points lower than those in November 2019. A small number of indexes that are normally published were not published in November.

Import Oil prices moved from a revised -0.9 % to +4.3 % month-over-month, and export agricultural prices up from +3.4 % to +3.7 %

• 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: The price index for U.S. imports increased 0.1 percent in November following a 0.1-percent decline the previous month. Import prices advanced 4.4 percent from April to September prior to the downturn in October. Despite the recent increases, prices for U.S. imports decreased 1.0 percent from November 2019 to November 2020. Prices for import fuel increased 4.3 percent in November following a 0.9-percent decline in October and a 4.7-percent drop in September. Higher prices for both natural gas and petroleum contributed to the November advance. Natural gas prices increased 49.1 percent, after declining 14.7 percent the previous month. The November advance was the largest monthly rise since the index increased 62.4 percent in November 2018. The price index for import petroleum advanced 2.1 percent in November following declines of 0.1 percent in October and 6.1 percent in September. Despite the November rise, import fuel prices fell 24.6 percent over the past year. A 27.0-percent drop in petroleum prices for the year ended in November more than offset a 27.5-percent increase in natural gas prices.

Exports: Prices for U.S. exports increased 0.6 percent in November and have not recorded a monthly decline since decreasing 3.5 percent in April. Higher prices for both agricultural exports and nonagricultural exports contributed to the November rise. Despite increases in each of the last 6 months, export prices fell 1.1 percent from November 2019 to November 2020. (See table 2.) Agricultural Exports: Agricultural export prices advanced 3.7 percent in November following increases of 3.4 percent in October and 2.7 percent in September. The November rise was the largest monthly increase since the index advanced 3.8 percent in December 2018. The increase in November was driven by 7.6- percent advances in prices for both soybeans and corn. Higher prices for dairy products and eggs, vegetables, wheat, fruit, meat, and cotton also contributed to the overall advance in November. Prices for agricultural exports rose 4.4 percent for the year ended in November, the largest 12-month advance since the index increased 5.3 percent in June 2018.

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.