by Mish

I reordered the charts in the BLS report to highlight what’s important for GDP purposes.

Imports subtract from GDP while exports add to GDP. With export prices falling more, this report is decidedly net negative for second quarter GDP.

Year-Over-Year Changes

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Select Import Prices

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Petroleum accounts for most of the import price drop. Other pockets of weakness include automotive vehicles and consumer goods. Prices of agricultural foods feeds, and beverages rose 1.1%

Select Export Prices

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Foods, feeds, and beverages account for only 8.8% of exports but that category accounts for nearly all the drop in export prices for both May and June.

US Dollar Effect

The US dollar index peaked in December of 2016 at 103.81. Today the US dollar index sits at 94.46. That’s a decline of 9 percent in 6-7 months.

A falling dollar is supposed to boost exports, making them cheaper. Charts prove that expected boost did not happen.

Balance of Trade

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Balance of Trade vs. First Quarter

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Compared to the first quarter, the trade deficit is running slightly higher on average.
For more details, please see Balance of Trade Deficit Near Expectations: Analyzing the Impact on Second Quarter GDP.

Mike “Mish” Shedlock

Import Prices Decline, Export Prices Rise: Impact on 1st Quarter GDP Estimates?

The BLS report on Import and Export Prices shows prices of imports declined 0.2% in March following increases in each of the 3 previous months.

Import and Export Prices Unexpectedly Dive

Headline price inflation numbers on imports and exports both came in well below consensus estimates.

Import Prices Surge vs Export Prices: Bad News for GDP Forecasts

Both import and export prices rose in April but the primary surge is in import prices.

Import Prices Flat, Export Prices Decline 0.5%

The strong dollar dampers the tariff impact on import prices except energy. Export prices decline led by agriculture.

Import Prices Unexpectedly Drop 0.6%, Most in 18 Months: Export Prices Drop 0.1%

Import prices fell 0.6%. Economists expected a 0.1% decline. Export prices fell 0.1%. Economists expected a 0.2% rise.

Import and Export Prices Plunge

Economists underestimated the magnitude of a decline in import prices and missed the boat entirely on export prices.

Expect Another Decline in Import and Export Prices: What, Me Worry?

Another decline in import and export prices will likely have the Fed pulling its hair out. A pair of charts will explain why.

Export Prices Rise, Led by Agriculture, Finished Goods Flat; Import Prices Barely Move

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.

Import Prices Decline Year-Over-Year, Export Prices Slightly Positive

In the wake of the declining price of oil, import and export prices are on a downward slope.