Highlights of the US import/export price data
- US July import prices +10.2% y/y vs +9.3% expected
- Prior was +11.2% y/y
- Import prices +0.3% m/m vs +0.6% exp (prior +1.0% m/m revised to +1.1%)
- Slowest rise in monthly import prices since Nov
- Export prices +17.2 % y/y vs +15.9% prior
- Prior export prices y/y +16.8%
- Export prices m/m +1.3% vs +0.8% expected (prior +1.2% m/m)
- Full report
The headline here is a bit deceptive because three of the four readings are beats and fairly significant ones. These numbers don't flow through cleanly to CPI but they are certainly pressures. Steel prices, for instance, are making new highs and that takes some time to work through the supply chain.
At the same time, energy isn't going to be the same kind of tailwind that it was. Excluding petroleum, import prices were up just 0.1% m/m and 6.8% y/y. A new problem though is natural gas, where prices have been steadily climbing. They rose 17.1% in July and 120.9% y/y.
Interestingly, China is exporting inflation. The prices of US imports from China in July rose 0.7% m/m -- the highest since 2008. Driven by machinery manufacturing, computer product manufacturing, and electronic equipment.