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BLS Highlights

BLS Charts and Comments on Import and Export Price Indexes for July 2018

Prices for U.S. imports recorded no change in July, the U.S. Bureau of Labor Statistics reported today, after edging down 0.1 percent in June. Falling nonfuel prices in July offset higher fuel prices. U.S. export prices decreased 0.5 percent in July following a 0.2-percent increase in June. The July decline was driven by a drop in agricultural export prices.

Import Prices

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Import Comments

  • All Imports: Import prices recorded no change in July, after falling 0.1 percent in June and rising 0.9 percent in May. U.S. import prices increased 4.8 percent for the year ended in July, the largest 12-month advance since the index rose 5.1 percent in February 2012. Import prices have not fallen on an over-the-year basis since the index fell 0.2 percent in October 2016.
  • Fuel Imports: Prices for import fuel advanced 1.6 percent in July following a 1.3-percent increase in June and a 6.5-percent rise in May. In July, increasing prices for petroleum and natural gas contributed to the rise in fuel prices. Petroleum prices advanced 0.9 percent in July, after rising 1.4 percent in June and 7.8 percent in May. Prices for natural gas increased 36.7 percent in July, the first monthly advance since January and the largest since the index rose 43.2 percent in November 2006. The price index for fuels increased 40.7 percent between July 2017 and July 2018, the largest over-the-year advance since the index rose 50.9 percent in March 2017. The 12-month rise in import fuel prices was led by a 43.6-percent advance in petroleum prices which more than offset a 0.5-percent decline in natural gas prices.
  • All Imports Excluding Fuel: Nonfuel import prices fell 0.3 percent for the second consecutive month in July. Lower prices in July for nonfuel industrial supplies and materials; foods, feeds, and beverages; and capital goods led the decline which more than offset rising prices for consumer goods. Automotive vehicles prices recorded no change. Despite the recent declines, nonfuel import prices rose 1.3 percent for the year ended in July. The 12-month advance was largely driven by higher nonfuel industrial supplies and materials prices although prices for consumer goods, capital goods, and automotive vehicles also increased over the past year.

Export Prices

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Export Comments

  • All Exports: U.S. export prices declined 0.5 percent in July following a 0.2-percent rise in June and a 0.7-percent advance in May. The July drop was the first monthly decrease since June 2017 and the largest since the index fell 0.6 percent in May 2017. Lower prices for agricultural exports drove the decline in July. Overall export prices advanced 4.3 percent between July 2017 and July 2018.
  • Agricultural Exports: Prices for agricultural exports fell 5.3 percent in July, after decreasing 1.0 percent in June and rising 1.6 percent in May. The fall in July was the largest monthly decline since the index decreased 6.5 percent in October 2011. A 14.1-percent drop in soybean prices was the primary contributor to the decline in agricultural prices; export prices for corn, wheat, fruits, and nuts also decreased in July. Agricultural export prices decreased 2.0 percent over the past year, the first 12-month drop since the index fell 1.8 percent in July 2017.
  • All Exports Excluding Agriculture: Nonagricultural export prices recorded no change in July following a 0.4-percent rise in June and a 0.6-percent advance in May. Falling prices for nonagricultural industrial supplies and materials and automotive vehicles were offset by rising prices for nonagricultural foods in July. Export capital goods and consumer goods recorded no change. Overall nonagricultural prices increased 5.0 percent over the past 12 months.

Inflation and Tariff Assessment

Were it not for energy prices there would be little or no import price pressures despite Trump's tariffs. The strong US dollar buffeted other import prices, in aggregate. In essence, Trump picked winners and lowers, and that is bad policy.

Trump's tariffs and retaliations are impacting agricultural exports.

It's a fool's mission to attempt to balance trade via tariffs. China let the yuan sink.

Mike "Mish" Shedlock