Import And Export Prices Edge Higher

Yesterday's consumer price did show some pressure in contrast to mostly subdued readings in last week's producer price report and also today's data on import and export prices. Prices for both imports and exports edged 0.2 percent higher in July which is better than expectations as were the year-on-year rates where contraction was less than expected, at minus 1.8 percent for imports and minus 0.9 percent for exports.

Yet the gain at least for imports is tied to a large 1.9 percent monthly rise in petroleum prices excluding which import prices were unchanged on the month. A positive for export prices is a 0.4 percent monthly gain for food prices which, having been in contraction, are now showing year-on-year life at plus 3.7 percent.

Country data continue to show very little price variation for Chinese imports, down 0.1 percent on the month and down 1.6 percent on the year. This suggests that Chinese exporters are only marginally discounting goods shipped to the US. Note that prices in this report, unlike the consumer and producer price reports, exclude tariff effects.

The inflation picture is uncertain right now, not showing much at the base of the economy but perhaps rising at the consumer level which, for the Federal Reserve, is the central measure for policy.