Import, Export Prices Fall

Cross-border price pressures are nowhere to be found in the import & export price report where import prices dropped 1.5 percent in November, the 5th straight drop and the steepest since June 2012, and export prices fell 1.0 percent for the 4th straight drop and matching the steepest drop since June 2012. The year-on-year rate for import prices is at minus 2.3, the steepest negative reading since April 2013, with export prices at minus 1.9, the steepest since October 2013.

And it's not just oil-related prices that are falling. Excluding petroleum, import prices fell 0.3 percent in the month for a 4th straight drop and the steepest since April this year while export prices, excluding both food and fuels for this reading, fell 0.5 percent for a third straight drop. The year-on-year reading for ex-petroleum import prices is at only plus 0.1 percent with ex-food & ex-fuel export prices at minus 0.4 percent.

A look at finished goods shows extended declines for nearly all readings. Prices of imported motor vehicles are down 0.1 percent in the month for a 1.0 percent year-on-year decline while prices of exported consumer goods are down 0.3 percent for both the monthly and year-on-year comparisons.

The strong dollar is an important factor that is keeping import prices down, but it's more than the dollar as evidenced by the export side of the data. Falling oil prices are having a spillover effect throughout the global price picture. Today's data point to very soft readings for tomorrow's producer price report and they won't be lifting expectations for Wednesday's consumer price report.

Recent History Of This Indicator:
Import prices in October declined a very steep 1.3 percent monthly. This was the fourth straight monthly decrease for import prices and the steepest in nearly 2-1/2 years. Oil was the central factor with petroleum import prices down 6.9 percent in the month. But even when excluding petroleum, import prices were down with October, September and August all at minus 0.1 percent. Year-on-year, total import prices were down a very sizable 1.8 percent though, in a rare plus reading in the latest report, were up a year-on-year 0.5 percent when excluding petroleum.

The export side was very similar with prices down 1.0 percent in October for a third straight decline. Agricultural prices were 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 were down 0.8 percent with agricultural prices down 4.6 percent.