Import and Export Prices

Thu Nov 16 07:30:00 CST 2017
Consensus Consensus Range Previous
Import Prices – M/M change 0.4% 0.1% to 0.7% 0.7%
Export Prices – M/M change 0.1% -0.1% to 0.7% 0.8%

Market Consensus Before Announcement
Oil prices skewed September’s import & export price report sharply higher, to gains of 0.7 percent for imports and 0.8 percent for exports. Core readings, however, showed much less pressure with cross-border prices for finished goods remaining flat. Econoday’s consensus for October import prices is 0.4. percent with export prices at 0.1 percent.

Definition
Import price indexes are compiled for the prices of goods that are bought in the United States but produced abroad and export price indexes are compiled for the prices of goods sold abroad but produced domestically. These prices indicate inflationary trends in internationally traded products.

Description
Changes in import and export prices are a valuable gauge of inflation here and abroad. Furthermore, the data can directly impact the financial markets such as bonds and the dollar. The bond market is especially sensitive to the risk of importing inflation because it erodes the value of the principal (the original investment) which is paid back when the bond matures. It also decreases the value of the steady stream of interest rate payments on this type of security. Inflation leads to higher interest rates and that’s bad news for stocks, as well. By monitoring inflation gauges such as import prices, investors can keep an eye on this menace to their portfolios.

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