The U.S. Import Price Index increased 1.7 percent in January, the Bureau of Labor Statistics of the U.S. Department of Labor reported today, led by a 5.5 percent increase in petroleum prices. The overall increase followed a 0.2 percent decline in December. U.S. export prices advanced 1.2 percent in January following a 0.4 percent rise in December.
The January increase in overall imports resumed the upward trend of the past year after a 0.2 percent decrease in December. The index, which had risen 3.1 percent in November and 1.5 percent in October, is up 13.7 percent over the past 12 months, the largest year-over-year increase since the index was first published in September 1982.
Inflation and Stocks
55 minutes ago
2 comments:
Be a little bit careful with this, bonddad. There is no question that this is a dramatic surge in import prices, which YoY were only about 2% before the Fed started lowering rates (and killing the dollar) in August.
But we had 11% YoY import prices 2 months ago, and during that period, what happened with the ultimate CPI? It went from 2% to 4.8%. So we may get a similar YoY CPI reading this month, but it doesn't necessarily mean that the consumer inflation rate will surge from there.
Further on my point above, here is the 2007 data for YoY cpi, followed by YoY data for import prices.
2.1 2.4 2.8 2.6 2.7 2.7 2.4 2.0 2.8 3.5 4.3 4.1
2007 YoY Cpi
0.0 1.2 2.8 2.1 1.2 2.3 2.8 1.9 4.8 9.1 12.0 10.4
2007 YoY Import prices
And for comparison, here is the same sets of data for 2005. You can see that import prices surged as high as 9.9%, and cpi inflation was at 4.7%
3.0 3.0 3.1 3.5 2.8 2.5 3.2 3.6 4.7 4.3 3.5 3.4
2005 YoY Cpi
5.7 6.1 7.6 8.4 5.9 7.4 8.2 8.2 9.9 8.2 6.4 8.0
2005 YoY import prices
This tells me that cpi will stay elevated, and perhaps cross 5% for a couple of months, but unless import prices continue to spin out of control, with the import inflation rate accelerating (during a recession?) this will be the top for YoY cpi inflation.
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