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Import Prices Decline Less Than Expected, Export Prices Increase

Tyler Durden's picture




 

Today's Import and Export Price Index, while not market moving, showed that the US still has some residual inflation to import (Prices of goods imported from China rose by 0.1% in August, and 3.6% from a year earlier). The August headline number came at -0.4%, on expectations of a -0.8% drop (0.3% previously), driven entirely by Fuel Imports which dropped by -1.8%, following a 0.4% increase in July, and a drop of -2.3% previously. In other words, the Fuel component of importer prices follows the Russell 2000 with a correlation of 1.000. AS for non-fuel imports, these was positive as has been the case for 12 months in a row with the exception of June 2011, when it was unchanged. Should QE3 be announced and priced in in one week, look for Brent, and its far less relevant cousin WTI, to soar, sending import prices to the moon once again, and so forth: we all know how the play ends.

Goldman's take:

1. US import prices declined by 0.4% (month-over-month) in August, a smaller drop than expected by the consensus. Prices of imported oil fell by 2.1% during the month, but other commodity prices rose. The index for industrial supplies and materials excluding oil gained 1.0%. According to the BLS, this rise was led by increases in gold and other precious metals. Prices for finished imports also generally rose during the month. The index for finished consumer goods-the component most closely related to the US CPI-rose by 0.3%. Cotton-related apparel products and household goods were the major sources of the increase. Finished capital goods prices rose by 0.1%, and prices for imported vehicles were unchanged.

 

2. Prices of goods imported from China rose by 0.1% (mom) in August, or 3.6% from a year earlier. Import price increases were not concentrated in any particular country during the month: prices for manufactured imports from both developed and emerging market economies increased by similar amounts.

From the report:

All Imports: The price index for overall imports fell for the second time in three months in August, decreasing 0.4 percent following a 0.3 percent upturn in July and a 0.7 percent drop in June. Import prices declined 0.6 percent over the past four months after rising 13.7 percent between September 2010 and April 2011. Overall, the index increased 13.0 percent for the year ended in August, compared to a 13.8 percent advance for the July 2010-11 period.

 

Fuel Imports: The August drop in overall import prices was driven by a 1.8 percent decline in fuel prices. The decrease was led by a 2.1 percent drop in petroleum prices which more than offset a 3.3 percent advance in the price index for natural gas. Despite declines in three of the past four months, fuel prices rose 41.1 percent over the past year. Prices for petroleum and natural gas each increased over the past 12 months, rising 43.5 percent and 8.0 percent, respectively. 

 

All Imports Excluding Fuel: In contrast, nonfuel prices advanced 0.2 percent for the second consecutive month in August. The price indexes for nonfuel industrial supplies and materials, consumer goods, and capital goods all increased in August, while foods, feeds, and beverages prices declined and prices for automotive vehicles remained unchanged. Nonfuel prices rose 5.3 percent for the year ended in August, primarily driven by a 17.1 percent advance in the prices for nonfuel industrial supplies and materials.        

And on the export side, "Export prices resumed an upward trend in August, rising 0.5 percent following a 0.4 percent downturn in July. Higher prices for agricultural and nonagricultural exports each contributed to the overall advance in August. The price index for overall exports also increased over the past year, increasing 9.6 percent." How long until the rest of the world resumes complaining that the US is exporting inflation yet again?

August highlights:

Import Prices

Nonfuel Industrial Supplies and Materials: Nonfuel industrial supplies and materials prices advanced 0.9 percent in August following a 0.6 percent rise in July. The August increase was led by higher prices for unfinished metals, notably a 3.2 percent increase in nonmonetary gold prices and a 5.4 percent advance in
the price index for other precious metals.       

Finished Goods: Prices for finished goods were mostly up in August. Consumer goods prices rose 0.3 percent and were driven by a 1.8 percent increase in the price index for cotton apparel and household goods, which also increased 13.1 percent over the past year. Capital goods prices ticked up 0.1 percent despite a 0.4 percent drop in computer, peripheral, and semiconductor prices.       
 
Foods, Feeds, and Beverages: Foods, feeds, and beverages prices fell 0.8 percent in August, led by a 12.9 percent drop in coffee prices. Prior to the August downturn, coffee prices had trended up since early 2010, rising 102.2 percent from March 2010 to July 2011.

Imports by Locality of Origin: The price index for imports from China ticked up 0.1 percent in August, the smallest monthly increase since the index was unchanged in September 2010. Import prices from China rose 3.6 percent over the past year, the largest 12-month advance since a 4.3 percent increase in October 2008. Import prices from Japan also rose in August, increasing 0.2 percent after a 0.2 percent drop the previous month. In contrast, the price indexes for imports from Mexico, Canada, and the European Union all decreased in August, down 0.9 percent, 0.2 percent, and 0.1 percent, respectively. 

Transportation Services: The index for import air passenger fares declined 3.0 percent in August, led by a 6.6 percent drop in European fares. Despite the decline, import air passenger fares advanced 7.4 percent over the past 12 months. Import air freight prices increased 0.6 percent in August and 13.9 percent over the past year.   

Export Prices
 
Nonagricultural Industrial Supplies and Materials: Prices for nonagricultural industrial supplies and materials rose 0.6 percent in August after edging down 0.1 percent in July. The August increase was driven by a 3.0 percent increase in nonferrous metals prices which more than offset lower fuel prices.     
 
Finished Goods: The price indexes for consumer goods and automotive vehicles each increased in August. The 0.2 percent increase in consumer goods prices followed a 0.6 percent increase in July. Automotive vehicles prices advanced 0.4 percent in August, led by a 0.6 percent rise in passenger cars.            

Transportation Services: Export air passenger fares rose 9.7 percent in August after increasing a similar 9.8 percent in July. The August advance was driven by a 24.8 percent jump in Asian fares, while increases in European, Asian, and Latin American/Caribbean fares all contributed to the increase in July. The index for
export air passenger fares rose 19.4 percent for the year ended in August. Export air freight prices fell 0.6 percent in August, but increased 16.4 percent over the past 12 months.

 

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Tue, 09/13/2011 - 08:50 | 1663153 Popo
Popo's picture

And heeeeeeere's today's bullish indicator!  

 

</sarc> of course...

Tue, 09/13/2011 - 09:12 | 1663214 Kuri
Kuri's picture

Find the black sheep : Dow + 2 %, Nasdaq + 3 %, SP + 1 %, SocGen - 15 %.

Tue, 09/13/2011 - 08:53 | 1663164 101 years and c...
101 years and counting's picture

mortgage rates at all time lows and gas prices still hovering near $4.  all QE does is increase mortgage rates and ramp up non essentials such as food and gas while the essentials prices fall (iPad vs iPad2).  Ben is backed into the corner and there is nothing that piece of shit can do.

Tue, 09/13/2011 - 08:55 | 1663165 kito
kito's picture

sheriff ben is locked and loaded, seems them pesky deflationary vermin just wont leave well enough alone in fedtown. townsfolks hear em comin some miles away, them unruly band of deflation thieves. 

Tue, 09/13/2011 - 08:57 | 1663168 Caviar Emptor
Caviar Emptor's picture

Understand this: non-fuel import prices are advancing. That's not how it was supposed to work: Outsourcing (of jobs and everything) to China and elsewhere starting with Nixon's China plan in 1971 was supposed to DEflate the price of finished goods. That was the only way that the US could print money to the moon and not face killer inflation. 

THe pigeons are coming home to roost, only they've turned into a dragon biting developed countries in the ass. Biflation continues to grow

Tue, 09/13/2011 - 08:58 | 1663170 DefiantSurf
DefiantSurf's picture

 

woohoo, this should be good for a 100pt ramp!

Tue, 09/13/2011 - 09:22 | 1663242 RSloane
RSloane's picture

At the very least, yes.

Tue, 09/13/2011 - 08:57 | 1663171 Robslob
Robslob's picture

There is ONE thing Ben can do...unfortunatley when you have a Phd in Econumics that is "print".

Phd = Print Hebrew Dollars

Tue, 09/13/2011 - 09:06 | 1663202 buzzsaw99
buzzsaw99's picture

keynes was a genius. [/sarc]

Tue, 09/13/2011 - 09:50 | 1663318 ww2vet
ww2vet's picture

fuck you-white trash piece of shit-get to you as soon as finish fucking your mom!!

Tue, 09/13/2011 - 08:58 | 1663175 Hman
Hman's picture

With currencies wild swings, this indicator has no meaning these days... EXCEPT "Dollar in short term deflation cycle"

Tue, 09/13/2011 - 08:59 | 1663180 monopoly
monopoly's picture

Might be a good day just to sit on the sidelines and watch the action. Too many cross currents. Day trading this market is for the fast and nimble and those who want to rack up commissions for the brokers.

Tue, 09/13/2011 - 09:48 | 1663311 disabledvet
disabledvet's picture

Probably not a bad idea after all the short sellers got their faces ripped off after chiming in right here no less. The bearishness here always fails to impress...though not the rightness of the wrongness that is portrayed.

Tue, 09/13/2011 - 09:00 | 1663183 cabtrom
cabtrom's picture

Only in America is obesity a symptom of poverty. Food inflation would prolly be a good thing for many of you slobs.

Tue, 09/13/2011 - 09:02 | 1663190 Robslob
Robslob's picture

Sorry to disappoint you...it isn't food that we are eating...

 

www.youtube.com/watch?v=8Sp-VFBbjpE

Tue, 09/13/2011 - 09:13 | 1663218 dwdollar
dwdollar's picture

It doesn't matter how high inflation drives food prices as long as government issues food stamps for anyone who applies.

Tue, 09/13/2011 - 09:01 | 1663184 Caviar Emptor
Caviar Emptor's picture

cotton apparel and household goods, which also increased 13.1 percent over the past year


Prior to the August downturn, coffee prices had trended up since early 2010, rising 102.2 percent from March 2010 to July 2011.

Import prices from China rose 3.6 percent over the past year, the largest 12-month advance since a 4.3 percent increase in October 2008

Despite the decline, import air passenger fares advanced 7.4 percent over the past 12 months. Import air freight prices increased 0.6 percent in August and 13.9 percent over the past year.   

Biflation, baby!

Tue, 09/13/2011 - 09:10 | 1663209 Caviar Emptor
Caviar Emptor's picture

Notice the appearence of double digits. For those of you tuned in, that's ominous

Tue, 09/13/2011 - 09:03 | 1663191 Cdad
Cdad's picture

News Flash....BlowHorn [CNBC]....

"I think Immelt is a great American patriot," a criminal syndicate Wall Street trader was heard saying.  

Translation:  long GE....end transmission.

Tue, 09/13/2011 - 09:08 | 1663206 Caviar Emptor
Caviar Emptor's picture

As a politician, I call all rich guys "Great Americans" and expect contributions in return

Tue, 09/13/2011 - 09:06 | 1663200 firstdivision
firstdivision's picture

I'm so glad to see that a miss on Import prices causes futures to go green and fixes all that ailes Europe.  FTSE will be up 1% by close at this rate. 

Tue, 09/13/2011 - 09:06 | 1663201 Caviar Emptor
Caviar Emptor's picture

International CPI's all coming in hot overninght. 

And trade balances coming in low. 

Now THAT's biflation in action, kids!

Tue, 09/13/2011 - 09:10 | 1663211 buzzsaw99
buzzsaw99's picture

the bernank could fix that. he won't, but he could, if he wanted to, which he doesn't.

Tue, 09/13/2011 - 09:33 | 1663283 Caviar Emptor
Caviar Emptor's picture

o yeah?

Tue, 09/13/2011 - 09:14 | 1663220 MFL8240
MFL8240's picture

Lower import prices is a sign of low demand and this is just one more in a long line of negatives for this economy. Expect Bloomberg to tell us that all is well.

Tue, 09/13/2011 - 09:23 | 1663247 rocker
rocker's picture

Please Tyler. I beg you. Unless it is with sarcasim.  No more Better or Less than expected.

Tue, 09/13/2011 - 09:32 | 1663280 Abiotic Oil
Abiotic Oil's picture

OT:

Everyone notice how Wolf Blitzer skipped Ron Paul on the Fed question last night?  Skip the guy who has been calling for an end to the Fed for 30 years?  Skip the guy who wrote the book "End the Fed"?  Skip the guy who heads the House Financial Committee and grills Bernanke and makes him sweat bullets with quivering voice?

Notice everyone else trying to sound like Ron?

If there is any more obvious evidence that the same people who own the banks own the media I don't know what it is.  They are scared.

Ron Paul is the front runner.

 

Tue, 09/13/2011 - 09:43 | 1663301 DefiantSurf
DefiantSurf's picture

They did the same crap on the MSNBC debate...they are very afraid of him

Tue, 09/13/2011 - 09:53 | 1663324 Hedge Hunter
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The great, magical, all-being Bernank can fix all these problems in 15 minutes, but doesn't want to appear to be meddling in the markets.

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