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):

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: U.S. import prices increased 0.3 percent in July, after advances of 1.1 percent in June and 1.3 percent in May. The July rise is the smallest monthly increase since the index ticked up 0.1 percent in November. Prices for U.S. imports advanced 10.2 percent from July 2020 to July 2021, led by higher prices for both nonfuel and fuel imports. Fuel Imports: Prices for import fuel rose 2.9 percent in July following increases of 5.5 percent in June and 5.2 percent in May. Higher prices for both petroleum and natural gas contributed to all 3 monthly advances. Prices for import fuel advanced 66.5 percent for the year ended in July. Petroleum prices rose 2.1 percent in July and 65.5 percent over the past 12 months. The price index for natural gas increased 17.1 percent in July and 120.9 percent from July 2020 to July 2021; the 12-month advance in July was the largest over-the-year increase since October 2005.

Exports: The price index for U.S. exports increased 1.3 percent in July following advances of 1.2 percent in June and 2.3 percent in May. U.S. export prices have not decreased on a monthly basis since declining 3.5 percent in April 2020. Higher nonagricultural export prices in July more than offset lower agricultural export prices. U.S. export prices advanced 17.2 percent for the year ended in July, up from the 16.9-percent increase the previous month. (See table 2.) Agricultural Exports: Agricultural export prices fell 1.7 percent in July, after a 1.5-percent advance in June and a 6.1-percent increase in May. The decline was the first monthly drop since a 2.2-percent decrease in August 2020. Lower prices for soybeans, fruit, and corn more than offset higher prices for dairy products, nuts, vegetables, and cotton. Despite the decline, prices for agricultural exports rose 29.2 percent from July 2020 to July 2021.

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.