A swing higher for oil-related products boosted import prices to a
stronger-than-expected 0.2 percent monthly rise in September, a result
that will help the Federal Reserve, at least marginally, in its efforts
to give a lift to inflation. Yet import prices do remain soft, evident
by the year-on-year rate which did improve by 2 tenths but remains
deeply negative at minus 1.6 percent. Weakness is also evident when
excluding petroleum, with this reading falling 0.1 percent on the month
for yearly contraction of minus 1.1 percent.
Export prices are
also weak, falling an unexpected 0.2 percent on the month with this
yearly rate, like on the import side, also at 1.6 percent contraction.
Prices of agricultural commodities, following August's 2.3 percent drop,
fell another 1.8 percent in September with this yearly rate barely in
the plus column at 0.2 percent. Prices of exported finished goods are
only marginally in the plus column, led by capital goods with a yearly
0.6 percent gain.
Prices of imported finished goods are tilted
toward contraction, with capital goods at minus 1.2 percent year-on-year
followed by autos at minus 0.7 percent and consumer goods at minus 0.4
percent. Country data, which like all data in this report exclude tariff
effects, continue to show very little price variation for Chinese
imports, down 0.2 percent on the month and down 1.8 percent on the year.
This suggests that Chinese exporters are only marginally discounting
goods shipped to the US.
Today's report offers its indirect
confirmation that global cross-border trade as a whole is flat if not in
contraction. Higher oil prices are not usually a plus for the total US
economy but regarding inflation, and the Fed's struggle to keep it on
the rise, higher oil prices may well be what policy makers would welcome
right now.
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