Import And Export Prices Weak

Import prices were weak in May, falling 0.3 percent on the month which was expected and 1.5 percent on the year which is 2 tenths deeper than Econoday's consensus. Non-petroleum imports offer a core reading for import prices and here the results are no better, at minus 0.3 percent on the month and minus 1.4 percent on the year.

Export prices are even weaker than expectations, at minus 0.2 percent vs Econoday's consensus for a 0.1 percent gain. Prices of agricultural exports continue to struggle, down 1.0 percent in May (which follows a 1.5 percent nosedive in April) for an annual rate of minus 5.3 percent. Export prices overall are down 0.7 percent on the year.

The reference period for this report is the first week of the month which was just before the US increased tariffs on $200 billion of Chinese imports. Import prices from China fell 0.1 percent in May with this reading in the next report for June certain to be a focus of attention.

Ongoing tariff effects are still to be measured and future tariff effects are unknown, but cross-border inflationary pressures otherwise are unusually subdued and for now will support global central bank efforts to stimulate accelerated economic growth.