Export price deflation continues January 2013 – Global Economic Intersection
Written by Steven Hansen
In January 2013, year-on-year price deflation continued in import prices for 8 of the last 9 months. Export price inflation increased slightly:
- with imports up 0.6% month over month, down 1.3% year over year
- and exports grew 0.3% month over month, up 1.1% year over year.
There was a general moderation of prices in most categories of imports and exports on the variation from month to month. However, the dominant factor in the year-over-year changes has been the rise in oil import prices and the fall in food export prices.
There is only a marginal correlation between economic activity, recessions and export / import prices. Prices can rise or fall, enter a recession or enter a period of expansion. Econintersect tracks this data set to adjust economic activity for the effects of inflation when there are clear relationships.
Year-to-year change – Import price (blue line) and export price (red line)
There are three cases of deflation outside of a recession: early 90s, late 90s, and mid-2000s
According to the press release:
All imports: Import prices rose 0.6 percent in January, the first monthly increase since rising 0.3 percent in October. Higher fuel prices were the main contributor to January’s increase, although prices for non-fuel products also rose. Despite January’s rise, import prices fell 1.3% over the past year and have not increased in 12 months since the index rose 0.8% between April 2011 and April 2012.
All exports: Export prices rose 0.3% in January, the first monthly increase since rising 0.1% in October. The rise in non-agricultural prices more than offset the fall in agricultural prices. The price index for all exports rose 1.1 percent for the year ended January and was driven by a 10.7 percent rise in agricultural prices.
The graph below shows how moderate the price increases have been over the past year.
Month-to-month change – Import price (blue line) and export price (red line)
The main drivers of import and export prices are petroleum (imports) and agricultural products (exports).
Month-to-month change in oil import prices (blue line) and month-to-month change in agricultural exports
There are different rates of inflation from year to year in the economy based on several Single Agency Measures (BLS):
Each inflation rate measures a different impulse point, and each represents the cost / price basket with respect to that group.
Cautions on the use of the export / import price index
The import and export price index values presented in this article are a weighted average for the whole category of exports or imports. The BLS has many sub-categories relating to one or more particular products. Econintersection the use of spot checks believes these sub-indices to be accurate.
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