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US Resumes Importing Inflation, Exporting Deflation, As Annual Import Prices Increase Highest Since August 2008

Tyler Durden's picture




 

So much for the end of inflation importing. After dropping by the most in 2011, or 0.6% in June, import prices once again increased firmly, rising by 0.3% in July, on expectations of a -0.1% decline. So much for that commodity drop "cooling" with fuel imports increasing 0.4%, and non-fuel imports up 0.2%. The take home: "Import prices rose 14.0 percent for the year ended in July, the largest 12-month advance since the index increased 18.1 percent for the year ended in August 2008." The picture is far uglier on the export side, where prices posted the first drop since July 2010. "The downturn was led by a decline in the price index for agricultural commodities, which was partially offset by an advance in  nonagricultural prices. Export prices rose 9.8 percent over the past 12 months, down from the 10.1 percent change for the year ended in June, which was the largest year-over-year increase in export prices since a 10.2 percent advance between July 2007 and July 2008." In other words: the US is now importing inflation and exporting deflation. What does that mean if you are a chairman of the Fed reserve? Why, that you want to return the favor of course, and as soon as possible at that, as this implies ongoing GDP contraction due to terms of trade.

More:

Import Prices

 

Nonfuel Industrial Supplies and Materials: The price index for industrial supplies and materials excluding fuels increased 0.7 percent in July following a 0.4 percent decrease in June. Higher prices for fertilizers and other chemicals were the largest contributors to the increase. Over the past 12 months, the index rose 16.3 percent.        

 

Finished Goods: Finished goods prices were mixed in July. Prices for consumer goods increased 0.4 percent, automotive vehicle prices fell 0.3 percent, and the price index for capital goods remained unchanged. Higher prices for cotton apparel and diamonds, which increased 1.8 percent and 4.2 percent, respectively, drove the advance in the price index for consumer goods. Falling prices for transport vehicles, down 4.5 percent in July, led the decline in the price index for automotive vehicles.        

 

Foods, Feeds, and Beverages: Foods, feeds, and beverages prices increased 0.5 percent in July following a 1.7 percent decline in June. The increase was driven by rising prices for fish and shellfish and green coffee, which increased 2.0 percent and 2.9 percent, respectively. 

 

Imports by Locality of Origin: The price index for imports from China advanced 0.4 percent in July following a 0.2 percent increase in June. Over the past year, import prices from China have increased 3.5 percent, the largest 12-month advance since the index rose 4.3 percent for the year ended October 2008.  In contrast, import prices from Japan fell 0.3 percent, the largest decline since a 0.6 percent decrease in September 2008.  

 

Transportation Services: Import air passenger fares edged down 0.1 percent in July. A 5.0 percent decline in European air fares was partially offset by a 6.1 percent gain in Latin America/Caribbean air fares.  Import air freight prices fell 0.2 percent in July.    

 

Export Prices

 

Nonagricultural Industrial Supplies and Materials: Nonagricultural industrial supplies and materials prices fell 0.2 percent in July, following a 0.6 percent downturn in June. A 10.2 percent drop in prices for steelmaking materials led to the overall decrease; a 2.3 percent decline in plastic prices was also a contributing factor.     

 

Finished Goods: The price indexes for consumer goods and for automotive vehicles both increased in July. The 0.6 percent increase in consumer goods was highlighted by rising prices for medicinal, dental, and pharmaceutical materials, which increased 0.6 percent. Automotive vehicle prices rose 0.5 percent in July, led by a 0.7 percent increase in parts prices. Capital goods prices were unchanged in July.             

 

Transportation Services: The index for export air passenger fares advanced 8.1 percent in July, driven by an 11.3 percent increase in European fares and an 8.8 percent increase in Asian fares. Over the past 12 months, the index for export air passenger fares rose 8.6 percent. Export air freight prices fell 0.8 percent in July after edging down 0.1 percent in June.

As for the housing starts and building permits which also came in earlier about in line with expectations, it was nothing but floor hugging noise so is completely irrelevant.

 

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Tue, 08/16/2011 - 08:47 | 1564807 John Law Lives
John Law Lives's picture

Here is another nugget:

Moody's slashes economic growth outlook for 2H2011 and 2012

http://blogs.wsj.com/economics/2011/08/15/moodys-lowers-economic-growth-...

Tue, 08/16/2011 - 08:53 | 1564824 Tyler Durden
Tyler Durden's picture

That's not Moody's. That's Mark Zandi. If there is anything that can convince us US GDP is set to surge, it is Mark Zandi saying GDP will stall.

Tue, 08/16/2011 - 08:55 | 1564831 SheepDog-One
SheepDog-One's picture

Our GDP is now basically all money printing activity, so a surge in GDP then means we're about to embark on vast new money printing?

Then buy gold funded by shorting Eurobonds.

Tue, 08/16/2011 - 22:23 | 1567646 slewie the pi-rat
slewie the pi-rat's picture

or, just buy gold with your "money" and don't worry about the long or short of it;  this is american gdp and FRNs getting printed, amigo, don't be too smart by half

your analysis is correct, i wld think;  just take the money, and buy the coins, maybe even a little silver.  some "junk" US silver coins might come in handy...someday...

Tue, 08/16/2011 - 09:21 | 1564924 John Law Lives
John Law Lives's picture

Correction:

Moody's Analytics, sister company to credit-ratings company Moody's Investors Service, slashes Economic Growth Outlook for 2H2011 and 2012.

Tue, 08/16/2011 - 09:02 | 1564852 John Law Lives
John Law Lives's picture

Correction:

Moody's Analytics, sister company to credit-ratings company Moody’s Investors Service, slashes Economic Growth Outlook for 2H2011 and 2012:

http://blogs.wsj.com/economics/2011/08/15/moodys-lowers-economic-growth-...

Tue, 08/16/2011 - 10:07 | 1565072 IQ 145
IQ 145's picture

Providentmetals.com selling $500 face value bags of walking liberty half dollars; 90% silver; at a 4% premium. I always find this remarkable; the fact that they aren't all bought by now. This is a particularly beautiful coin, very "serious" looking and very easy for people to identify and accept as silver money. kind of off topic; but not really, ehh?

Tue, 08/16/2011 - 08:52 | 1564810 SheepDog-One
SheepDog-One's picture

'Floor hugging noise'...LOL awesome.

I kept receipts from last summer to show we have had 30% inflation at least- last summer 50 lb of cracked feed corn cost me $8, this July $13.

Rock on, bankrupt negative growth america....oh and dont worry about those 25% unemployed, Im pretty sure we just keep printing more money to feed, house, and clothe them and their families forever.

Tue, 08/16/2011 - 08:59 | 1564848 youngman
youngman's picture

And nobody...nobody...will cut them off....not a Democrat..nor a Republican..nor and independant.....but the outside market forces will.....

Tue, 08/16/2011 - 09:04 | 1564859 SheepDog-One
SheepDog-One's picture

Yep, and the Republi-Indi-Crats string pullers will soon apply the outside market forces, just like WW2.

Tue, 08/16/2011 - 08:53 | 1564826 speculator
speculator's picture

Hmm, remember what happened with the dollar and the general price level after August 2008? In a global crash and recession... http://www.youtube.com/watch?v=H7Sg3UKdaEc

The dollar index is no lower now than in 2008, despite three years of hyperinflation and dollar-crash hysteria. The real dollar crash happened from 2000 - 2008, while nobody but Ron Paul and other old-school gold bugs were watching. 

Tue, 08/16/2011 - 08:55 | 1564834 tmosley
tmosley's picture

lol, prepare to be surprised.

Tue, 08/16/2011 - 09:00 | 1564850 SheepDog-One
SheepDog-One's picture

'Surprised' how.

Tue, 08/16/2011 - 08:58 | 1564845 SheepDog-One
SheepDog-One's picture

The dollar may have been a bit better in 2000 than now, yet an overall crash since 1913 of 98%. I guess we'll really feel the pinch when the dollar is soon worth 1/8th of 1 cent compared to a 1913 dollar.

Tue, 08/16/2011 - 09:07 | 1564868 Cdad
Cdad's picture

Nothing angers me more than this, Dog.  NOTHING!  That these criminal syndicate Wall Street bankers are green-lighted to sell my currency into oblivion so as to enhance the earnings of their international equity holdings...RAGE!

If the sheeple ever really came to understand this, there would be true and violent revolution in America.  Unfortunately, this is one area where the sheeple have no reference or context.  I don't believe that ALL Americans are morons, but I don't think folk get this central bank, preferred broker dealer bank driven crime wave.

One day they will...after it is too late, of course.  And by then, the Lear jet exodus will have begun.

Tue, 08/16/2011 - 09:14 | 1564897 SheepDog-One
SheepDog-One's picture

Planned destruction! Frog in a pot syndrome keeps everyone calm while theyre boiling to death. 5% monthly drops in the 401K are reasoned away as 'Well, I guess it could be worse, and the Clownhorn tells me its getting better...plus Ben seems like such a nice man, he's looking out for me'. Man I want to be well away from all population centers when this pops one day!

Tue, 08/16/2011 - 13:14 | 1565959 Manthong
Manthong's picture

"Financial Repression" is baked into the cake and provides government debt maintenance and perceived control in exchange for the destruction of the middle class.

The problem is that they think they can control it, and to a point they can.. but the “point” that they lose the handle is coming soon and few understand what that means.

 

Tue, 08/16/2011 - 09:10 | 1564887 Flakmeister
Flakmeister's picture

The proper financial term is "Slow, lingering, death"

Tue, 08/16/2011 - 09:04 | 1564858 buzzsaw99
buzzsaw99's picture

...while nobody but Ron Paul and other old-school gold bugs were watching.

 

nobody? egregious trolling in a school zone -2

Tue, 08/16/2011 - 09:06 | 1564866 SheepDog-One
SheepDog-One's picture

I was certainly watching. Those were the salad days though, and you were considered 'insane' if you were warning certain trouble was coming.

Tue, 08/16/2011 - 09:02 | 1564851 SheepDog-One
SheepDog-One's picture

Well theyve ramped futures a bit on this 'floor hugging noise', not quite green yet from -150 but still a half hour till open. Go robots go!

Tue, 08/16/2011 - 09:02 | 1564853 Koffieshop
Koffieshop's picture

So this is the world slowly but surely rejecting Dollars. Those Dollars are comming home from international trade service.

Am I right?

Tue, 08/16/2011 - 09:07 | 1564871 chinaboy
chinaboy's picture

This data appears to be consistent with China's latest statistics.

The same pattern also happens to China, but started much earlier. If you look at import of crude, iron ore, corn, etc,  price rosed much faster.

All this is to say is that inflation ignited with QE(n) looped back at the U.S..

 

Tue, 08/16/2011 - 09:13 | 1564895 Mike2756
Mike2756's picture

The Fed is really boxed in now, they have to let the dollar rise.

Tue, 08/16/2011 - 09:16 | 1564905 SheepDog-One
SheepDog-One's picture

Let the dollar rise while delivering the QE3 $trillions?

Tue, 08/16/2011 - 09:28 | 1564944 Cdad
Cdad's picture

The Fed is really boxed in now, they have to let the dollar rise.

Correct.  It is highly likely that we are poised for an equity sell off due to a miracle pop in the US dollar...so that it can be printed into oblivion once again.  Until such time as that Dixie rises, I see no further monitization, such as we saw in QE2.

Other tricks up old Ben's sleeve...maybe...but not a blatant monitization here until that dollar rises.  And if I am wrong about this, and I have been wrong many times...then things will get much worse and much faster than the Street is currently positioned for...which will also result in an equity selloff.  

Tue, 08/16/2011 - 09:10 | 1564885 SheepDog-One
SheepDog-One's picture

Still waiting for any market fear and panic to drive the sheeple to bleat for QE3...or are QE $trillions now just a regular semi-annual part of normal US economic policy to be delivered without any debate, or apparent need?

Tue, 08/16/2011 - 09:16 | 1564908 youngman
youngman's picture

Wow ..industrial production was way up..double expectations...and utilization was way up.....have to dig into those numbers...

Tue, 08/16/2011 - 09:39 | 1564991 carlexi
carlexi's picture

What is the source of this information and the official name of this index?

Thank you.

Tue, 08/16/2011 - 09:51 | 1565018 carlexi
carlexi's picture

Does this number in the charts above measure overall inflation or just inflation on imports?

What is the overall inflation in the US right now?  (Not the government propoganda that excludes food and fuel) but the real overall US inflation?  What is a free market index that shows a more honest view of inflation?

thanks.

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