Import & Export Prices Rise

The rise in oil prices gave a second straight but still limited boost to cross-border inflation pressures in April. Import prices rose 0.3 percent to match March's revised gain. These are the first back-to-back monthly gains since June and May last year. The year-on-year change, at minus 5.7 percent, is the best since December the year before, 2014. Petroleum imports are behind the improvement, up 4.1 percent in April following a big 9.6 percent gain in March. Higher petroleum prices have boosted industrial supplies the past two months though durable goods, less directly affected by oil, also show two straight solid gains. The gains haven't helped finished prices yet which, in low single-digit decline, show no improvement.

Export prices rose 0.5 percent in April for the best showing since May last year. The year-on-year rate at minus 5.0 percent is the best since January last year. Agricultural prices boosted April but are still down nearly 10 percent on-the-year. One sign of strength, echoing the durables gain on the import side, is a rare monthly jump in capital goods prices which, year-on-year, are still down but only fractionally.

Country data show improvement across most trading partners but are still in the negative column. Import prices with China are down 1.9 percent year-on-year with the EU down 1.6 percent.

The decline underway this year in the dollar is another major factor that should help lift import prices which, though still concentrated in oil, are showing improvement and will help what has been a stubbornly weak inflation outlook.

Recent History Of This Indicator:
Import & export prices ended a long run of contraction in March and are, at least on the import side, expected to show a sizable increase in April, at a consensus 0.6 percent. The strength of the dollar together with deflationary pressures among trading partners have been major factors behind the decline in import prices and the dollar's recent depreciation is expected to begin to have an inflationary effect. The rise in oil prices should also help reflate the import side. Export prices, which have been held down by weak global demand, are expected to come in unchanged and match March as the best result since May last year.