Import Prices Continue to Rise

Prices of goods and services imported to the U.S. in May rose +.9% MoM, continuing a string of recent gains. Over the past three months, gains have averaged +1.3% MoM, in sharp contrast with the deflation import prices brought earlier this decade.

The rise in prices is not limited to just energy products. Non-petroleum import prices rose +.5% MoM in May, the largest gain since December, and have risen +2.8% YoY, which is a much faster pace than overall import prices have risen (+1.1% YoY). Higher metals prices led the gains, but higher food and automotive prices have also contributed. Over the past year, food prices have risen +7.9% YoY, while auto prices have grown just +.9% YoY. Consumer goods prices have risen +1.6% YoY, while capital goods prices have declined -.1% YoY. On a year-over-year basis, petroleum product import prices have actually fallen -4.6% YoY.

China is no longer exporting deflation as their economy heats up and internal inflation rises. Prices for goods form China rose +.3% MoM in May, the largest increase ever reported. Prices from China are now up year-over-year, for the first time ever, at +.1% YoY. Higher energy prices pushed up import prices from Mexico and Canada. Import prices from Europe also rose, but they held steady from Japan. On an annual basis, prices from Canada, a major US trade partner, rose +1.7%YoY. Import prices from Mexico and Canada have risen even more, +3.2% YoY and +2.5% YoY respectively.

Export price gains slowed in May to +.1% MoM, with the gains coming from non-agricultural prices increasing by +.2% MoM. Non-agricultural export prices have been trending higher for the last year, and are up +3.4% YoY. Agricultural export prices were unchanged in May, after rising substantially earlier this year. Agricultural export prices have risen over 18% YoY. Overall export prices have risen +4.3% YoY.