Import And Export Prices Fall

Import prices fell 1.0 percent in December but reflect an 11.6 percent monthly drop in petroleum imports. Excluding petroleum and other fuel products, import prices were unchanged. Export prices also fell in December, down 0.6 percent reflecting an oil-related decline of 4.6 percent for nondurable industrial supplies. The export decline was limited by a solid 3.9 percent rebound for agricultural export prices that follow a 1.7 percent gain in November.

For finished goods, whether imports or exports, prices remain dead flat, showing nearly no change whether for capital goods, consumer goods or motor vehicles.

The price rebound underway for oil points to headline firming in this report for January but the fundamental inflation story, like the themes of last week's consumer price report and yesterday's producer price report, remains very subdued and is not raising the need for Federal Reserve rate hikes.