Import Prices
Prices for U.S. imports declined 0.3 percent in May, the U.S. Bureau of Labor Statistics reported today, the first monthly decline since a 1.4-percent drop in December. Import prices advanced 1.8 percent from December to April before the downturn in May. The price index for overall imports decreased 1.5 percent over the past 12 months, matching the drop in January. These were the largest over-the-year declines since the index fell 2.2 percent in August 2016.
Fuel Imports: Import fuel prices declined 1.0 percent in May, after rising 25.4 percent over the previous 4 months. Lower prices for both petroleum and natural gas contributed to the May decline. Petroleum prices fell 0.9 percent in May, after a 4.7-percent advance in April. The May decrease was the first monthly decline since a 15.3-percent drop in December. Natural gas prices fell 6.8 percent in May following a 51.1- percent decline the previous month. Overall fuel prices decreased 1.1 percent over the past year. The decline was driven by a 1.9-percent drop in petroleum prices which more than offset a 2.5-percent rise in natural gas prices.
All Imports Excluding Fuel: Prices for nonfuel imports fell 0.3 percent in May following a 0.1-percent decline in April and a 0.2-percent decrease in March. Lower prices for nonfuel industrial supplies and materials; foods, feeds, and beverages; capital goods; and automotive vehicles all contributed to the May decrease in nonfuel prices. The price index for nonfuel imports declined 1.4 percent between May 2018 and May 2019.
Export Prices
Prices for U.S. exports declined 0.2 percent in May, the first monthly drop since the index fell 0.6 percent in January. Lower prices for both agricultural and nonagricultural exports contributed to the May decline. Export prices decreased 0.7 percent over the past 12 months, the largest over-the-year decline since the index fell 1.1 percent in October 2016.
Agricultural Exports: The price index for agricultural exports declined 1.0 percent in May, after decreasing 1.5 percent the previous month. In May, lower prices for soybeans, wheat, and fruit more than offset higher prices for meat and vegetables. Agricultural export prices fell 5.3 percent over the past year, the largest 12-month drop since the index declined 9.1 percent in April 2016. A 20.6-percent decrease in soybeans prices for the year ended in May led the overall decline in agricultural prices. The drop in soybeans prices more than offset higher vegetable prices over the past 12 months.
All Exports Excluding Agriculture: Nonagricultural export prices decreased 0.2 percent in May following a 0.2-percent increase the previous month. In May, falling prices for nonagricultural industrial supplies and materials; consumer goods; nonagricultural foods; and automotive vehicles more than offset rising prices for capital goods. The price index for nonagricultural exports also declined 0.2 percent for the year ended in May. Lower prices for nonagricultural industrial supplies and materials drove the overall decrease. In contrast, prices for each of the major finished goods categories rose over the past 12 months.
Mike “Mish” Shedlock
They don’t call it a race to the bottom for nothing.
If this is deflation, maybe we should be happy. Prices are dropping and wages are not. That seems like good news to me. I know Mish has discussed why inflation targeting is crazy. This is contrary to what most think (including myself before reading through it).
Strange as I thought the trade issues were making prices for consumers much higher.
Lower prices is ALWAYS and everywhere good. There simply are no exceptions. Even at the ultimate corner case of everything in the universe being straight up free. While, conversely, higher prices, for anything, is always a negative. Again, all the way up to, and including, the corner case of everything being infinitely expensive. There simply are no exceptions to that truism whatsoever. Not even in any possible alternate world, where every law of nature is completely different.
If this is deflation then I am not impressed.
Yup. Call me when the average worker in San Francisco can afford to raise a family in reasonable standard; walking distance to work….
That’s not ever going to happen. Too much money globally chasing too few resources in cities like San Francisco or New York.
There’s just as much money chasing cell phones, beer and tennis socks. The only difference being, those latter industries are sorta-halfway-kinda market based. While the housing rackets operate based on principles laid down by Stalin, Mao and Kim. Whose other experiments in “economics,” also did result in similar shortages, for all but privileged party members. Just like is happening with housing in SF and NYC. Weird how that is….
Well there is little land left to build houses on in some large metro areas on the coasts. Geography is a real thing.
Buildings are three dimensional structures. Covered “Volume” is what people live in. Humans aren’t grass.
There’s plenty of space left in both New York and San Francisco, even if you restrict building height to relatively cheap/affordable 60 story towers. At today’s prices, you may be able to do 150 stories profitably (just guessing, as things do start getting dicey at tall heights), but even at an easy 40-60 stories, housing availability would be massively improved. Probably to the point of being a largely solved problem.
Of course, solving problems is the exact opposite of what progressivism is about. Progressivism being, instead, preoccupied with creating as may problems as possible for productive people. In order to force them into servitude to useless progressive rabble incapable of doing anything more than collect Fed Welfare.
That’s why I said houses. A high rise building is not a house. Besides it is mostly foreign money chasing after asset prices now.
It sure is looking like deflation has arrived. God help us.
I’m thinking of a word that rhymes with ‘flation’, starts with ‘de’.