January 2021 Import Year-Over-Year Inflation Now +0.9%

Year-over-year import price indices inflation remained in contraction and grew from -0.3 % to +0.9 %.

Analyst Opinion of the Import / Export Price Situation

Per the BLS:

Prices for U.S. imports increased 1.4 percent in January, after rising 1.0 percent in December, the U.S. Bureau of Labor Statistics reported today. The January advance was the largest 1-month rise since the index increased 1.4 percent in March 2012. U.S. export prices increased 2.5 percent in January following advances of 1.3 percent and 0.7 percent the 2 previous months. The January increase was the largest advance since the index was first published on a monthly basis in December 1988.

Note that:

Coronavirus (COVID-19) Pandemic Impact on January 2021 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 January 2021 release of U.S. Import and Export Price Indexes. Survey response rates for January were 5.9-percentage points lower than those in January 2020.

Import Oil prices moved from a revised +8.1 % to +7.4 % month-over-month, and export agricultural prices up from +0.9 % to +0.6 %

  • the markets were expecting (from Econoday):

(Click on image to enlarge)

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)

(Click on image to enlarge)

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.

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