Import/Export Price Report Shows Minus Signs

Minus signs sweep October's import & export price report including a very steep 1.3 percent monthly decline for import prices. This is the fourth straight monthly decline for import prices and the steepest in nearly 2-1/2 years. Oil is the central factor with petroleum import prices down 6.9 percent in the month. But even when excluding petroleum, import prices are down with October, September and August all at minus 0.1 percent. Year-on-year, total import prices are down a very sizable 1.8 percent though, in a rare plus reading in today's report, are up a year-on-year 0.5 percent when excluding petroleum.

The export side is very similar with prices down 1.0 percent in October for a third straight decline. Agricultural prices are the main factor on the export side with related exports down 2.1 percent for a fifth straight decline, all of them steep. Year-on-year, export prices are down 0.8 percent with agricultural prices down 4.6 percent.

The negative pressure is beginning to move into prices of finished goods which, after having been flat all year, are now inching into the negative column. Import prices of consumer goods (ex auto) fell 0.2 percent in the month with capital goods down 0.1 percent. Year-on-year, import prices of both capital goods and autos are in the negative column, at minus 0.1 percent and a very steep minus 0.7 percent, respectively. Export prices of finished goods show a monthly 0.3 percent decline for consumer goods (ex auto) and a 0.2 percent decline for capital goods. Here, year-on-year prices are still holding in the plus column but not by much, led by a 0.6 percent rise for capital goods.

Cross-border price pressures are clearly deflationary right now in what is a problem for policy makers who, here in the US, Europe and Japan, are fighting to reverse the downshift. Today's results point to very weak reports on producer and consumer prices next week.

Recent History Of This Indicator:
Import prices fell 0.5 percent in September for the third straight decline. Year-on-year, import prices were deep into the deflationary zone at minus 0.9 percent. The drop in imported petroleum prices, down 2.0 percent in the month and down 6.6 percent year-on-year, was a key factor in the import-price decline, but even when excluding petroleum, import prices fell 0.2 percent in the month. Year-on-year, the ex-petroleum reading was in the plus column but not by much, at plus 0.7 percent.

Export prices fell 0.2 percent for a second straight monthly decline and were also down 0.2 percent year-on-year. Here, agricultural prices were a key factor, down 0.9 percent in the month and down 2.9 percent year-on-year. When excluding agriculture, export prices also fell 0.2 percent on the month and were unchanged year-on-year.