It's been an ugly week for inflation data. The market seems to think the Fed can tame it by waiting until December but that's some serious imported inflation that's going to be working its way through prices for awhile.
The Bureau of Labor Statistics publishes the import and export price indexes monthly. They measure what US buyers pay for foreign goods and services and what foreign buyers pay for American output. The data rarely moves markets on its own, but it is a useful read on how the dollar, global commodity prices and foreign producer costs are feeding into the US economy. One point worth knowing: import prices exclude tariffs and duties. That makes the series a clean test of whether foreign exporters are absorbing tariff costs or passing them through. It is also one of the inputs used to deflate trade in the GDP accounts.
In August, import prices rose 0.7%, and energy dominated. Import fuel prices were up 26.8% from a year earlier, and natural gas import prices more than doubled, rising 102.6%. Export prices climbed 8.6% over the 12 months to August. China stands out: import prices from China rose 1.0% in August, the biggest monthly gain since the series started in January 2004.
The September report follows two hot inflation prints this week. Headline CPI rose to 3.7% y/y against 3.6% expected, with core at 2.6% versus a 2.5% forecast and a 0.33% monthly gain. Energy jumped 5.2% on the month, and a 9.1% surge in gasoline accounted for more than half the overall increase. PPI was worse. Producer prices rose 1.3% m/m and 6.3% y/y, far above the consensus of 0.5% and 5.3%. That was the fastest monthly increase since March 2022 and the highest annual rate since December 2022.
This article was written by Adam Button at investinglive.com.
Source: Investing Live - News
