Import And Export Price Year-over-Year Deflation Moderated Again In November 2016

Import and export prices continue to deflate year-over-year – although the year-over-year rate of deflation again moderated this month – with import prices now barely deflating.

Analyst Opinion of the Import / Export Price Situation

Both import and export price deflation is moderating when looking year-over-year. The month-over-month figures given in the headlines only confuse. At the current rate of moderation of deflation (trend line) – both imports and export prices should start inflating by the end of the year. What was interesting this month is that import fuel prices increased whilst total imports deflated – and export prices deflated month-over-month whilst agriculture imports deflated.

Import Oil prices were up 7.2 % month-over-month, and export agricultural prices up 0.4 %.

with import prices down 0.3 % month-over-month, down 0.1 % year-over-year;

and export prices down 0.1 % month-over-month, down 0.3 % year-over-year..

the markets were expecting (from Bloomberg):

Consensus Range Consensus Actual Import Prices – M/M change -0.7 % to 0.3 % -0.4 % -0.3 % Export Prices – M/M change -0.2 % to 0.3 % +0.0 % -0.1 %

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.