Both import and export prices rose in April but the primary surge is in import prices.
There is nothing to cheer about in this news, but the Econoday squawking loudly nonetheless.
Price data were unusually weak in March and now the first indication in April is unusually strong. Import prices jumped 0.5 percent which is well above the 0.1 percent consensus and just above the 0.4 percent high estimate. Export prices rose 0.2 percent to beat the consensus by 1 tenth.
Petroleum, up 1.6 percent in the month, gave a boost to prices on the import side but ex-fuel pressures are evident nevertheless. Non-petroleum imports rose 0.4 percent which is the second best monthly showing for this reading of the 8-year expansion. Details show unusual price strength for vehicles, both imports and exports, and solid monthly strength at 0.3 percent for food products, again both imports and exports.
The shift from March weakness to April strength points perhaps to the effects of seasonal issues, specifically March’s heavy weather (which hurt March) and Easter’s calendar shift into April (which also hurt March to the benefit of April). Today’s results suggest that March’s 16-year low for the core PCE price index is likely to be quickly reversed and that Thursday’s producer prices and Friday’s consumer prices may both come in higher than expected.
Import and Export Prices Month-Over-Month
Hooray! Consumers have to pay more for stuff. Not only that, the BLS revised March import prices from -0.2% to +0.1%. BLS revisions took export prices from +0.2% to +0.1%.
March revisions will subtract from revised first-quarter GDP and April data will lower forecasts for the second quarter.
Meanwhile, consumers feel pressures as prices rise more than wages.
The Econoday comments were remarkably lame, even by Econoday standards. It’s economic madness to cheer this result.
Mike “Mish” Shedlock