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Export Price Synopsis

• The price index for U.S. exports declined 0.9 percent in June, after falling 1.9 percent the previous month.
• U.S. export prices fell 12.0 percent from June 2022 to June 2023, the largest over-the-year decline since the 12-month percent change series was first published in September 1984.
• Agricultural Exports: Prices for agricultural exports fell 1.6 percent in June following a 2.4-percent decline the previous month. Lower prices in June for soybeans, fruit, and nuts more than offset higher meat prices.
• The price index for agricultural exports decreased 9.8 percent for the year ended in June, the largest over-the-year decline since a 10.7-percent drop from March 2015 to March 2016.
• All Exports Excluding Agriculture: Nonagricultural prices decreased 0.9 percent in June following a 1.9-percent drop in May. Lower prices for nonagricultural industrial supplies and materials and nonagricultural foods in June more than offset higher prices for capital goods, consumer goods, and automotive vehicles.
• Prices for nonagricultural exports declined 12.4 percent over the past 12 months, the largest over-the-year drop since the 12-month percent change series was first published in March 1986.

Import Prices Month-Over-Month and Year-Over-Year

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Import Price Synopsis

• U.S. import prices decreased 0.2 percent in June and have fallen in 5 of the first 6 months of 2023, after rising 3.2 percent in 2022.
• Prices for U.S. imports declined 6.1 percent over the past year, the largest 12- month drop since the year ended May 2020.
• Fuel Imports: Prices for import fuel rose 0.8 percent in June following a 4.3-percent decline the previous month. Higher petroleum prices in June more than offset lower natural gas prices.
• Despite the June advance, import fuel prices fell 36.4 percent over the past year, the largest 12-month drop since a 37.5-percent decrease in June 2020.
• The price index for petroleum rose 1.1 percent in June, after falling 3.8 percent in May. Petroleum prices declined 35.1 percent for the year ended in June.
• Natural gas prices decreased in June, falling 5.6 percent following a 20.9-percent drop the previous month. Prices for import natural gas declined 78.4 percent from January to June, driving the index down 70.8 percent over the past 12 months. The 12-month decrease was the largest over-the-year drop since the 12-month percent change series was first published in September 1982.

Rate Hike Odds Rise Slightly

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A quick check of CME Fedwatch data shows rate hike odds for December 2023 actually rose slightly despite this very weak report.

The first rate cut is still the same as yesterday. The market pencils in a cut for March of 2024, with a small up tick in the odds the Fed holds pat rather than cut.

Producer Prices Hold to Narrow, Fed Pleasing Range, for 9 Months

Yesterday, I commented Producer Prices Hold to Narrow, Fed Pleasing Range, for 9 Months

And on July 12, I noted Despite CPI Surprise to the Downside, Higher for Longer Interest Rate Outlook Holds

Import and export price declines, the CPI, and PPI should promote a less hawkish wait-and-see attitude by the Fed despite the CME reading.

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