Export prices sank 0.8% in August vs. the Econoday Consensus of -0.1%.
Amusingly, the entire range of exports predictions was -0.2% to +0.1%. On a percentage basis, the closest economist missed the mark by 300% and the consensus by 700%.
Import prices fell 0.2% vs. a consensus of -0.1% in a range of -0.4% to +0.2%. At least one economist got the number correct, and at least one economist was on Mars.
August import prices were down for the first monthly decrease since February. Import prices slipped 0.2 percent and dropped 2.2 percent from a year ago. Expectations were for a monthly decline of 0.1 percent. The August downturn was driven by lower fuel prices. Excluding foods and fuels, import prices were unchanged on the month. Fuel prices declined 2.1 percent in August following a 2.5 percent drop in July. Both the August and July decreases were driven by lower petroleum prices which fell 2.8 percent in August and 3.6 percent in July. In contrast, prices for natural gas increased 12.1 percent in August and 28.0 percent the previous month.
Export prices sank 0.8 percent after increasing 0.2 percent last time. This was the first monthly drop since the index edged down 0.1 percent in March. The consensus view was that prices would edge down just 0.1 percent. On the year, export prices declined 2.4 percent. Excluding agriculture, prices were down 2.2 percent from a year ago. Agricultural export prices decreased 3.4 percent in August, the largest monthly drop since the index fell 4.2 percent in August 2013.
Clearly, the drop in import prices will be a setback to improving inflation data in the U.S. with no pressure yet for finished goods prices.
Cross-border price pressures have been showing life, offering some reason for optimism that overall inflation may begin to track higher. Import prices in July did rise only 0.1 percent but were held down by a downdraft in petroleum prices, excluding which prices rose a sizable 0.5 percent. Export prices rose 0.2 percent in July but were up 0.3 percent when excluding agricultural prices which have been soft this year. Despite improvement in core readings, pressures in this report have been modest with no pressure yet visible for finished goods prices.
Import and Export Prices
This Econoday writer is a real gem.
He, she, or robotic it, whatever may be, is a never ending source of entertainment providing consistently silly comments about inflation while spinning every conceivable bit of news into a possible economic liftoff of some sort.
Mike “Mish” Shedlock