The import price index is down 0.2 percent in June after a small upward revision to down 0.4 percent in May. The decline is close to the consensus of down 0.3 percent in the Econoday survey of forecasters. The import price index is down 6.1 percent year-over-year, extending the downward trend for prices of imports which have been on the decline if unevenly since a near-term peak of up 13.0 percent in March 2022.

Despite a 0.8 percent increase in imports of fuels which are priced in US dollars in June from May, fuel prices are down 36.4 percent year-over-year. Fuel prices have come down significantly since the spike that was a consequence of the Russian invasion of Ukraine. Excluding fuels, the import price index is down 0.4 percent month-over-month and down 1.4 percent year-over-year.

Import prices for goods are generally more moderate in June. Prices for imported capital goods are down 0.1 percent in June from May, and are up a modest 0.6 percent from June 2022. Prices for imported vehicles, parts, and engines are down 0.1 percent from the prior month, and up 1.6 percent year-over-year. The index for imported consumer goods excluding automotive is 0.3 percent lower in June from May and up 0.1 percent year-over-year.

One major source of import price inflation in the past year or more has been the cost of air freight services. Many businesses have turned to moving the most needed items by air to bypass delays along the supply chain. That has eased considerably more recently. While air freight services are seeing some month-over-month volatility in part due to fuel costs, the deceleration year-over-year is striking. Compared to June 2022, the imported air freight index is down 33.8 percent and has been well into the double-digits for the past 8 months.

Import prices are no longer a significant source of price inflation.

The export price index is down 0.9 percent in June from May after a decline of 1.9 percent in May from April. The is more of a decrease than the consensus of down 0.3 percent in the Econoday survey of forecasters. The export price index is down 12.0 percent compared to June 2022.

While the price of agricultural exports is down 1.6 percent in June from May, prices are also down for exports excluding agriculture at down 0.9 percent. Compared to June 2022, agriculture export prices are down 9.8 percent and nonagricultural prices are down 12.4 percent.

Import prices fell 0.6 percent in May with June's expectations at a 0.3 percent fall. Export prices, which fell a very steep 1.9 percent in May, are expected to fall 0.3 percent. This report has been pointing consistently to cooling if not chilling in cross-border price pressures.

Import price indexes are compiled for the prices of goods that are bought in the United States but produced abroad and export price indexes are compiled for the prices of goods sold abroad but produced domestically. These prices, which exclude tariffs and taxes, measure underlying inflationary trends in internationally traded products.

Changes in import and export prices are a valuable gauge of inflation here and abroad. Furthermore, the data can directly impact the financial markets such as bonds and the dollar. The bond market is especially sensitive to the risk of importing inflation because it erodes the value of the principal (the original investment) which is paid back when the bond matures. It also decreases the value of the steady stream of interest rate payments on this type of security. Inflation leads to higher interest rates and that's bad news for stocks, as well. By monitoring inflation gauges such as import prices, investors can keep an eye on this menace to their portfolios.