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 11/9/07 For Oct 2007 | |||||||||||||||||||||||
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Highlights
High energy and food prices are feeding inflation pressures as import prices jumped 1.8 percent in October for a steep year-on-year rate of 9.6 percent. Prices excluding petroleum rose 0.5 percent with the year-on-year rate at 3.2 percent, the latter an elevated rate that is certain to raise concern at the Federal Reserve.
Pressures are concentrated in food and energy, areas of course that are outside the core rate but that will eventually bleed into the core rate. Import prices for foods, feeds & beverages rose 1.0 percent in the month for a year-on-year rate of 9.8 percent. Import prices for fuels & lubricants rose 6.7 percent for a year-on-year rate of over 40%. Import prices for petroleum products rose 6.9 percent in the month for a year-on-year rate of over 41%.
But a plus in the data is still tame rates for consumer goods which inched 0.1 percent higher in October for a year-on-year rate of 1.4 percent, in trend and down from nearly 2.0 percent earlier in the year.
On the export side prices rose 0.9 percent for a year-on-year rate of 5.6 percent. Pressure was centered in agricultural prices which jumped 3.9 percent in the month for a year-on-year rate approaching 30%. The year-on-year rate for non-agricultural prices is 3.9 percent.
The lack of pressure for import consumer prices will help limit concern at the Federal Reserve though the overall data, fed by energy and food and most importantly the weakening dollar, do point to rising inflationary pressures.
Import prices jumped 1.0 percent in September reflecting a 5.4 percent surge in petroleum prices. The year-on-year rate is very high at 5.2 percent. But excluding petroleum, import prices dipped 0.2 percent in September for a year-on-year increase of 2.0 percent. But the devil is in the detail. Most of this decline in nonpetroleum import prices was primarily due to a 1.4 percent drop in industrial supplies & materials excluding petroleum. Imported capital goods prices were flat in September. Autos and consumer goods excluding autos both rose 0.2 percent in both September and August. To get an idea of the impact of import prices on the consumer, markets need to look more at these details and not just on the alleged core figure for import prices.
Import prices Consensus Forecast for October 07: +1.0 percent
Range: +0.7 to +1.8 percent
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Yearly changes in import and export prices reveal long term trends in inflation for tradable goods. |
| 2007 Release Schedule | ||||||||||||||||||||||||||
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