July export prices rose 0.4% vs a 0.1% rise in import prices. The rise in import prices was in-line with the Econoday consensus estimate.
The Econoday Keynesian parrot was not happy. The parrot always wants your dollar to buy less and thus roots for higher import prices.
A boost in petroleum gave a lift to import prices while a boost from agricultural gave a boost to export prices. Import prices in July posted an as-expected 0.1 percent increase as petroleum was up 0.7 percent in the month. Outside of petroleum, however, July import prices limped in at no change. Prices of finished exports remain dead flat, at or near zero whether month-on-month or year-on-year. The yearly rate for overall imports is steady at a modest 1.5 percent.
Export prices rose a stronger-than-expected 0.4 percent with agricultural products up 2.1 percent to more than shave in half sharp declines in the two prior months. Prices for finished exports, like finished imports, are flat with consumer goods, at minus 1.7 percent year-on-year, especially weak. Total export prices are up only 0.8 percent year-on-year which is not good news for the nation’s exporters.
But what is good news for exporters is the tangible decline underway in the dollar. This points to increasing pressure for import prices which, though making them less affordable to U.S. buyers, will help the Federal Reserve in its efforts to stimulate inflation.
Import Prices
Export Prices
This report may give a tiny boost to third quarter GDP estimates. It takes a substantial move in import or export prices to move GDP more than a tick or two.
Mike “Mish” Shedlock
And this is a GOAL and a GOOD thing – why?
It kills the middle class. It destroys worker’s paychecks. It has the highest impact on the poor.
But in these days of MASSIVE government debt and massive pensions debts on the local/state level, the only way “out” is to inflate away these debts.
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“will help the Federal Reserve in its efforts to stimulate inflation.”
“This points to increasing pressure for import prices which, though making them less affordable to U.S. buyers, will help the Federal Reserve in its efforts to stimulate inflation.”
If buyers retrench or find alternatives, then you might get deflation. Anyway, the statistics are so flawed as to be meaningless for all practical purposes. The economic problems are structural and political (e.g. taxes, regulations), which is why the monetary obsession is leading no where. Amazing how clueless is the consensus. Election polls should be easy compared to economic forecasting, yet even that was 99% wrong in 2016. Just saying, something is very wrong in the methodology and statistics, and all the writing is therefore suspect.
Indeed, all the propaganda (economic, political and cultural) has lost all credibility. Earlier today was in busy restaurant with big screen tuned to CNN. Zero diversity of viewpoints and ideas. Pure propaganda and very repetitive. Nobody else watching.