Indexes are compiled for the prices of goods that are bought in the United States but produced abroad and the prices of goods sold abroad but produced domestically. These prices indicate inflationary trends in internationally traded products. Why Investors Care
| Released on 6/13/07 For May 2007 | |||||||||||||||||||||||
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Highlights
Strong foreign demand in combination with high oil prices and a softening dollar are heating up imported inflation. Import prices jumped 0.9 percent in May and were still up 0.5 percent when excluding the month's 2.7 percent jump in import prices of petroleum. But year-on-year rates showed less pressure, up 1.1 percent for total import prices and up 2.8 percent excluding petroleum in readings that are a bit softer than the prior month. By country of origin, pressures continue to be centered in commodity-exporting countries including Canada and Latin America. Prices with China rose 0.3 percent in the month but have been better behaved in prior months.
Export prices rose 0.1 percent in the month for a year-on-year rate of 4.3 percent. Agricultural export prices were unchanged but are still up 18.2 percent on the year. Non-agricultural export prices rose 0.2 percent in the month for a 3.4 percent year-on-year rise.
Strong economic growth -- underscored by headline jumps in this morning's retail sales data -- may now be combining with increased inflation pressures, a combination that could very likely increase the heat on interest rates. Today's import price data will make markets especially edgy ahead of tomorrow's PPI and Friday's CPI reports.
Import prices jumped 1.3 percent in April, following a jump of 1.5 percent in March. Both months were led by petroleum prices. But excluding petroleum, import prices remain contained, showing a 0.2 percent gain in April and a 0.3 percent gain in March. Oil prices leveled off in May but at high levels. With foreign economies running hot and oil prices feeding into costs of production, even non-petroleum import prices are starting to see upward pressure. And a weak dollar is not helping.
Import prices Consensus Forecast for May 07: +0.3 percent
Range: 0.0 to +1.0 percent
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Yearly changes in import and export prices reveal long term trends in inflation for tradable goods. |
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