July 2021 Import Year-over-Year Inflation 'Declines' To +10.2%

Year-over-year import price indices inflation marginally declined from +11.3 % to +10.2 %.

Analyst Opinion of the Import / Export Price Situation

Inflation continues to be hot.

Per the BLS:

Prices for U.S. imports increased 0.3 percent in July, after advancing 1.1 percent the previous month, the U.S. Bureau of Labor Statistics reported today. The July increase was driven by higher fuel prices. U.S. export prices rose 1.3 percent in July following a 1.2-percent advance in June.

Also note:

BLS discovered an error affecting the export price indexes for air freight, air freight-Europe, and air freightAsia for January 2021 forward. The items for foreign-to-foreign destinations were mistakenly excluded from the calculation of the indexes.

Import Oil prices moved from a revised +5.5 % to +2.9 % month-over-month, and export agricultural prices up from +1.5 % to -1.7 %

  • the markets were expecting (from Econoday):
  Consensus Range Consensus Actual
Import Prices - M/M change 0.4 % to 1.2 % +0.6 % +0.3 %
Import Prices - Y/Y change 10.5 % to 10.9 % +10.7% +10.2 %
Export Prices - M/M change 0.7 % to 1.4 % +0.8 % +1.3 %
Export Prices - Y/Y change 15.5 % to 16.7 % 16.6 % +17.2 %

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.

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