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 12/12/07 For Nov 2007 | |||||||||||||||||||||||
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Highlights
Of all the troubles that are appearing in the economic outlook and financial markets, imported inflation, unfortunately, may be among the top. Import prices surged 2.7 percent in November for a year-on-year rise of 11.4 percent. The monthly increase is the largest in 17 years. Import prices excluding petroleum are also showing pressure, up 0.7 percent in the month for a 3.0 percent year-on-year rise that doesn't appear extreme but is on the high end of trend. Oil-related pressure is extreme with fuels & lubricants up 10 percent for a nearly 50 percent year-on-year gain. Industrial supplies rose 6.6 percent in November for a nearly 30 percent year-on-year rise. Natural gas surged 16.2% in the month. And petroleum jumped 9.8 percent for a 53 percent rise, the same year-on-year rise as crude oil. Import prices with Canada are really soaring, up 4.7 percent in the month and confirming reports from industry where cross-border business is under scrutiny.
Export prices are also showing pressure reflecting rising food costs. Export prices jumped 0.9 percent in the month for a 6.1 percent year-on-year rise. Export prices for agricultural products rose 1.4 percent for a year-on-year gain of 23 percent.
Weakness in the dollar, high energy prices and high food prices are making conditions difficult for the Federal Reserve which has to balance the risk of inflation against the risk of economic slowdown. Today's data will make markets especially concerned ahead of tomorrow's producer price and Friday's consumer price reports.
Import prices are starting to feed overall inflation pressures as import prices jumped 1.8 percent in October for a steep year-on-year rate of 9.6 percent. Most of the impact was related to oil prices. Still, prices excluding petroleum rose 0.5 percent in October 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. The weaker dollar and higher oil prices are likely to create significant upward pressure on import prices in the near term.
Import prices Consensus Forecast for November 07: +2.0 percent
Range: +0.7 to +2.7 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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