June Import/Export Prices Preview
June import prices are expected to rise 2% following a 2.3% increase in May, a 2.4% increase in April and a 3% increase in March. This would reflect a y-o-y import price index increase of 18.6%.
June export prices are expected to rise 0.7% following a 0.3% increase in May and a 0.5% increase in April. Y-o-Y export prices were up 8% in May while food export prices y-o-y in May was up a solid 33.3%.
Import prices are expected to once again outpace export prices in June largely due to USD deterioration and surging energy import prices. The goods news is that the lag in export price growth relative to import prices should boost the appeal of US assets overseas, which should help narrow the trade deficit.
The bad news is that import prices, especially energies, have shown few signs of relenting from their current growth pace which will squeeze consumer purchasing power even further.
The June import prices index should receive a shot in the arm from the 7% increase in petroleum prices over the period; petroleum import prices were up 7.8% in May following a 5.9% increase in April and a 9.8% increase in March. There is also the risk of an elevated level for import prices ex-petroleum as a result of pipeline inflation from previous reports.
June export prices should receive a boost from a 7% increase in ag-export prices while non-ag export prices are expected to increase 0.6%.