Import And Export Prices See Little Pressure

Outside of an upward price surge for petroleum and a gain for foods, there's not much pressure to be seen in the June import & export price report. Import prices, inflated by a monthly 6.4 percent surge in petroleum prices, rose 0.2 percent. When excluding petroleum, prices actually fell and noticeably, down 0.3 percent for the steepest drop since December. Prices on the export side, pulled higher by a 2.5 percent jump in foods and also petroleum-related gains for industrial supplies, rose 0.8 percent with the ex-foods and ex-fuel reading in the negative column, at minus 0.1 percent.

Prices of finished goods, whether imported or exported, remain negative to flat across the board including a 0.2 percent price dip for imported consumer goods. Import prices with China, reflecting a drop in computer prices, fell 0.4 percent in the month for the largest drop in more than 3 years.

Year-on-year rates, benefitting from easy comparisons with last year's oil collapse, are showing improvement but are still negative, at minus 4.8 percent for import prices and minus 3.5 percent on the export side.

There are some signs of life in this report, but none that point to a breakout into consumer prices which remain stubbornly weak and a major risk for policy makers. A new challenge for prices is the post-Brexit jump in the dollar which will pull on import prices in the July report. This week is heavy with inflation data with producer prices to follow on Thursday and consumer prices on Friday, neither of which are expected to much traction.

Recent History Of This Indicator:
A jump in petroleum prices gave a lift to much of the import & export price report in May and more of the same is expected for June where the consensus is calling for a 0.5 percent rise on the import side and a 0.3 percent rise on the export side. Deeper in the report, however, prices showed very little change especially for finished goods. Still, pressures in this report are welcome news for policy makers, particularly on the import side which points ahead to higher consumer prices.