Import And Export Prices Continue Descent

Import and export prices in October extended this year's slow descent underwater, falling 0.5 percent for the former and 0.1 percent for the latter. Year-on-year, import prices are down 3.0 percent and export prices down 2.2 percent, both the weakest showings in three years.

Agricultural export prices rose 1.9 percent in October but follow declines of 1.7 and 2.4 percent in the prior two months. Excluding agriculture, export prices, at minus 0.3 percent in the month, have been down in five of the last six reports.

Import prices from China have been edging lower and slipped 0.1 percent in October's report. Note, however, that tariff effects are excluded in this report. Import prices with other trading partners show roughly the same result, including minus 0.1 percent for the Eurozone and 1.5 percent for Canada.

Declining import prices are deflationary and are working against the Federal Reserve's efforts to give a moderate to lift inflation, results that raise pressure for further rate cuts. For exporters, declining export prices are a negative for both sales and profits.