Import and Export Prices Tick Up, Econoday Robot Claims Progress

Import prices are up 0.1% matching the Econoday Consensus estimate in an unusually wide range of estimates from  -0.3% to +0.4%.

Export prices rose 0.3% vs.a consensus 0.1%. This may boost third quarter GDP estimate slightly.

Progress is the theme in September’s import & export price report where emerging pressures may be appearing. Import prices rose 0.1 percent in the month with export prices up 0.3 percent. And year-on-year rates are finally coming up for air, at only minus 1.1 percent for import prices which is the best showing since August 2014. The year-on-year rate for export prices is minus 1.5 percent for their best showing since October 2014.

Petroleum prices, which have been pulling down import prices for the last two years, rose 1.2 percent in the month to narrow this year-on-year decline to a modest looking 2.4 percent which is down from the low double digits in the last report. But excluding petroleum, import prices didn’t show any life at all, unchanged though the year-on-year rate did improve 1 tenth to minus 0.8 percent. On the export side, farm products fell 1.0 percent in the month for a year-on-year rate of minus 3.2 percent. But non-agricultural prices, in a clear plus, rose 0.4 percent with the year-on-year rate improving 8 tenths to minus 1.4 percent.

This report backs Federal Reserve expectations that weakness in import prices is a fading negative for the inflation outlook. Producer prices will be posted tomorrow with marginal improvement the expectation, at least for the headline.

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

Export Prices Month-Over-Month and Year-Over Year

Progress?

The Econoday robot as do those in academic wonderland call rising prices progress. Non-robots and those living in the real world would prefer their paychecks go further.

Import prices are still down 1.1% from a year ago and if oil takes another swoon may stay there a while.

Mike “Mish” Shedlock