Import and export price growth continues after years of deflation.

Analyst Opinion of the Import / Export Price Situation

Yikes – seems like inflation is rampant? The elephant in this significant inflation is fuel / oil. If one ignores these commodities, the year-over-year inflation rate for imports and exports is almost zero.

Import Oil prices were up 7.3 % month-over-month, and export agricultural prices were down 0.3 %.

There is only marginal correlation between economic activity, recessions and export / import prices. Prices can be rising or falling going into a recession or entering a period of expansion. Econintersect follows this data series to adjust economic activity for the effects of inflation where there are clear relationships.

Econintersect follows this series to adjust data for inflation.

Year-over-Year Change – Import Prices (blue line) and Export Prices (red line)

There are three cases of deflation outside of a recession – early 1990?s, late 1990?s, and mid 2000?s. Import price deflation is normally associated with strengthening of the dollar relative to other currencies.

According to the press release:

All Imports: Import prices rose for the third consecutive month in February, increasing 0.2 percent, after a 0.6-percent advance in January and a 0.4-percent rise in December. The increase in February was driven by rising nonfuel prices, unlike the previous 2 months when higher fuel prices led the advances. The price index for imports also rose over the past year, increasing 4.6 percent. That rise was the largest 12-month advance in import prices since a 5.1-percent increase in February 2012.

All Exports: Prices for U.S. exports advanced 0.3 percent in February and have not recorded a monthly decline since the index fell 0.8 percent in August. In February, rising prices for both agricultural exports and nonagricultural exports contributed to the overall advance. Export prices increased 3.1 percent over the past 12 months, the largest over-the-year rise since the index advanced 3.6 percent between December 2010 and December 2011.