Import And Export Prices Show Weakness

A steep 12.1 percent drop in prices of petroleum imports pulled total import prices down a sharper-than-expected 1.6 percent in November. Yet there's wider price weakness in the data. When excluding petroleum, import prices are still in the negative column, at minus 0.3 percent in the month. Import prices of finished goods, whether capital goods, consumer goods, or autos, were dead flat in the month with industrial supplies, which often have petroleum components, falling sharply.

Export prices likewise show weakness, falling an unexpected 0.9 percent in November despite a welcome 1.8 percent price bounce for agricultural exports. Export prices for industrial supplies fell 3.0 percent in the month with export prices for finished goods flat to marginally negative in the month.

Year-on-year rates are breaking lower, up only 0.7 percent for imports and 1.8 percent for exports. Agricultural prices, despite November's bounce, are still in the negative column for exports, at minus 1.7 percent.

The impact of oil's $20 price collapse in November is likely to be limited to November with the next import/export report for December, based on $50 oil, likely to at least prove stable. Still general price softness, underscored by yesterday's consumer price report, may further build expectations that Federal Reserve policy makers may begin to scale back their 2019 rate-hike plans.