Deflationary Tailwinds In US Import/Export Prices by by Eric Bush, CFA, Gavekal Capital Blog
A strong dollar is very prevalent in today’s import and export price release. Import prices have declined by -11.4% year-over-year which is the largest decline since 9/2009. If we go back as far as the data exists (1983),the current decline is the largest on record outside of the financial crisis. Excluding fuels, import prices have declined by just over 3% which again is the largest decline since 10/2009. The decline in import prices looks like it has a ways to run as well. The dollar has gained over 16% over the past year. The last time it was this strong was in 2009. Import prices excluding petroleum products eventually declined at a rate of -7.27% in July 2009. Currently, import prices excluding petroleum products is down- 3.2% YoY.
At this year's SALT New York conference, Jean Hynes, the CEO of Wellington Management, took to the stage to discuss the role of active management in today's investment environment. Hynes succeeded Brendan Swords as the CEO of Wellington at the end of June after nearly 30 years at the firm. Wellington is one of the Read More
There is certainly a deflationary tailwind in both imported and exported consumer goods excluding autos. Imported consumer goods ex-auto prices have declined at a -1.2% YoY rate. This is a largest year-over-year decline than we even saw in 2009 and is at a pace that was hit just a couple of times in 1998 and 2002.
Export prices of consumer goods ex-autos is in a free fall. Going back to 1984, export prices in this category have never declined at the pace it is currently declining at. Year-over-year, export prices of consumer goods ex-autos is down -2.86%.