May 10, 2017 – Import prices tell us the cost of products that are produced abroad and purchased in the U.S., while exports are goods produced in the U.S. but purchased abroad.
Import prices in April rose 0.5%, 0.4% more than the general consensus of a 0.1% rise. March’s import price change of -0.2% was revised to 0.1% (+0.3%). These past 12 months import prices increased by 4.1%, a smaller increase from the previous revised 4.3% (-0.2%). Export prices rose by 0.2% in April almost matching the consensus expectations of 0.1%. Similar to the previous month’s export price growth that was revised to 0.1%. Export year-over-year prices have risen by 3%.
There has been an increase in the gap between import and export prices since November for a number of reasons. Automotive vehicles had the largest price gain (0.5%) since April 2012. Non-petroleum fuel prices and imports from Mexico and Canada have increased, as well as industrial supplies exporting for less for the second month in a row. What is important to take away from this is net exports should be closing the gap in the coming months. As the U.S. Dollar depreciates in value foreign goods will be relatively more expensive to import and exports increase as they become more desirable (from US goods being relatively cheaper). Net exports are a direct component of GDP which will increase more in the future.