Highlights
Import prices extended their run of increases in July though at a slightly less severe monthly rate of 1.7 percent, down from four prior months of increases near or above 3 percent. The year-on-year rate however continued to extend into record territory, up 21.6 percent vs. 21.1 percent in June. The easing month-on-month rate reflects less severe increases for petroleum imports, up 4.0 percent vs. four straight months of high single digit readings. Excluding petroleum, import prices rose 0.9 percent vs. June for a second straight month -- a troubling reading pointing to pass through of petroleum costs. Unusually high prices for capital goods, up 0.3 percent in the month for a 2.1 percent year-on-year gain, also offer evidence of cost pass through, especially as actual imports of capital goods have been soft. Prices of food imports are also quite high, up 1.5 percent in the month and adding to a four-month string of similar gains. Year-on-year, food import prices are up 15.7 percent.

Food prices are the central factor behind rising export prices, up 1.4 percent vs. June for a 10.2 percent year-on-year gain. Prices of agricultural exports jumped 6.8 percent in July for a numbing 41.9 percent year-on-year gain. High food prices are however a big plus for the nation's agricultural sector which is in a boom. Excluding agricultural products, export prices still rose an elevated 0.8 percent.

This report points to trouble for tomorrow's CPI in what might be a slight negative for Treasuries through the day. Inflation pressures remain extremely high but are not increasing despite some evidence of cost pass through, perhaps in line with hopes that easing economic growth, as well as the steep decline underway in oil prices, may point to easing inflation pressures through the second half.

2008 Release Schedule

Released On: 1/11 2/15 3/13 4/11 5/13 6/12 7/11 8/13 9/11 10/10 11/14 12/11 Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov