Cross-border prices are correcting higher. Import prices, up 0.5 percent on the month in August, exceeded Econoday's consensus for a second straight month, as did export prices which jumped 1.3 percent. Year-over-year rates remain in the negative column but to the least degree since early in the year, currently at 3.0 percent contraction for imports and 5.5 percent contraction for exports.

OPEC production cuts have been driving up fuel, excluding which import prices edged 0.1 percent lower for a second straight month with this annual rate at minus 0.8 percent. Turning back to exports, agricultural prices have declined sharply in three of the four last months, falling 2.2 percent in August for annual contraction of 7.8 percent. Excluding agriculture, export prices jumped 1.7 percent on the month in August.

OPEC cuts are directly inflating the import side of this report and are certain to be a topic of concern at next week's Federal Reserve meeting. Econoday's Relative Performance Index stands at plus 23 to indicate outperformance of US data; the reading falls a bit to plus 16 when stripping out what have been mostly hotter-than-expected inflation data like this report.

Import prices rose a higher-than-expected 0.4 percent in July with August expectations at a 0.3 percent rise. Export prices, which rose 0.7 percent in July and which were also higher than expected, are expected to rise 0.4 percent. This report had been pointing consistently to cooling underlying price pressures, that is until July's gains.

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.