Like consumer inflation, cross-border inflation is flat. Import prices in June fell an as-expected 0.2 percent and, when excluding contraction in petroleum, were unchanged. Prices of petroleum imports fell 2.2 percent which is notably the 4th monthly decline in a row. Non-petroleum details include: no change for durable goods, minus 0.2 percent for vehicles, minus 0.1 percent for consumer goods, and a lonely looking 0.2 percent price gain for capital goods.
Agricultural prices, down 1.5 percent in June, are key on the export side where total prices, like the import headline, also fell 0.2 percent. Excluding agriculture, prices were unchanged which likewise matches the core reading on the import side. Prices of finished exports also show little pressure: plus 0.2 percent for consumer goods, no change for capital goods, and minus 0.1 percent for vehicles.
Weakness in oil prices is a wildcard right now for the inflation outlook. Core readings have so far resisted the negative spillover from this year's fall in oil prices but continued weakness could begin to pull overall prices down with them. The lack of inflation is in fact the biggest threat right now to Federal Reserve policy.
Consumer prices and producer prices were both weak in June and similar results are expected for import and export prices. Import prices in June are expected to be pulled 0.2 percent lower largely by low energy prices. Export prices, where food prices are focus, are expected to come in unchanged.