| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Import Prices - M/M | -0.1% | -0.1% to 0.1% | 0.1% | 0.0% | |
| Import Prices - Y/Y | 1.6% | 1.6% | 1.5% | ||
| Export Prices - M/M | -0.1% | -0.1% to -0.1% | 0.7% | -0.5% | -0.3% |
| Export Prices - Y/Y | 1.4% | 0.7% | 1.0% |
Highlights
Import prices edged 0.1 percent higher in July, extending a three-month run of readings near the zero line. Annual imported inflation has held in the middle to low single digits the last four months, at 1.6 percent in July. These readings won't be raising any inflation alarms at the Federal Reserve. Costs of imported energy have been comparatively steady not skewing import readings much at all. When excluding fuel prices, import prices were, like the headline, also up 0.1 percent in the month and a scant 1.2 percent on the year.
Export prices, however, did show life in July, up 0.7 percent on the month though this annual rate is, like on the import side, flat, up only 1.4 percent. Exports of fuels and lubricants led July's gain, rising 4.5 percent on the month though annual growth is modest at 1.3 percent. Prices of agricultural exports fell 1.5 percent on the month for annual contraction of 6.0 percent, readings that are not favorable for the domestic farm sector.
Export prices, however, did show life in July, up 0.7 percent on the month though this annual rate is, like on the import side, flat, up only 1.4 percent. Exports of fuels and lubricants led July's gain, rising 4.5 percent on the month though annual growth is modest at 1.3 percent. Prices of agricultural exports fell 1.5 percent on the month for annual contraction of 6.0 percent, readings that are not favorable for the domestic farm sector.
Market Consensus Before Announcement
Import prices in July are expected to decrease 0.1 percent versus no change percent in June. Export prices, which fell 0.5 percent in June, are also seen falling 0.1 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.
