| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Import Prices - M/M | -0.6% | -0.7% to -0.4% | 0.0% | -0.4% | -0.5% |
| Import Prices - Y/Y | -2.0% | -2.2% to -1.0% | -1.6% | -1.4% | -1.5% |
| Export Prices - M/M | -0.6% | -1.0% to -0.5% | -0.9% | -0.9% | |
| Export Prices - Y/Y | -3.2% | -5.2% |
Highlights
Cross-border price pressures are benign and offer tangible, if comparatively limited, debate points for those on the Fed who want to pull rate cuts forward. Import prices were unchanged on the month in December, only a bit of a disappointment compared to Econoday's consensus for a 0.6 percent decline. Nevertheless, December's reading extends a full year of results hovering around the zero line. The year-over-year rate of minus 1.6 percent extends to four months of similar contraction.
Export prices fell 0.9 percent for a third month in a row in December and this is a bit deeper than Econoday's consensus. Year-over-year contraction is minus 3.2 percent, slightly shallower than recent readings in the negative mid-single-digits but still favorable.
Note that energy prices continue to be neutral for import inflation. Import prices excluding fuels were, like the headline, unchanged on the month and down 0.8 percent on the year. Fuel hasn't been a substantial factor for import prices since mid-2022.
Export prices fell 0.9 percent for a third month in a row in December and this is a bit deeper than Econoday's consensus. Year-over-year contraction is minus 3.2 percent, slightly shallower than recent readings in the negative mid-single-digits but still favorable.
Note that energy prices continue to be neutral for import inflation. Import prices excluding fuels were, like the headline, unchanged on the month and down 0.8 percent on the year. Fuel hasn't been a substantial factor for import prices since mid-2022.
Market Consensus Before Announcement
Import prices percent fell 0.4 percent in November with December's expectations at a decline of 0.6 percent. Export prices, which in November fell 0.9 percent, are expected to also fall 0.6 percent.
Definition
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.
Description
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.
