If it wasn't for oil, imported inflation would be going in reverse. Import prices came in unchanged in July which is at the low end of Econoday's consensus range. Excluding a 0.9 percent gain for petroleum imports, prices fell 0.1 percent on the month.
Export prices came in far below the consensus range, down 0.5 percent as prices of agricultural exports fell a very sharp 5.3 percent in the month. Year-on-year rates are at plus 4.3 percent for overall exports but down 2.0 percent for agricultural exports.
Tariff effects on metals appear to be fading. Prices for imported iron & steel, which spiked in April and May, did rise 0.3 percent in July but June was soft at only a 0.1 percent gain. Still, the year-on-year rate does show the effects, at 19.2 percent. Prices for imported aluminum fell 1.8 percent in July with this yearly rate at plus 9.7 percent.
Prices of finished goods, whether for imports or exports, remain very soft showing only fractional yearly increases for imported consumer goods, capital goods and vehicles with similar readings on the export side.
By country, import prices with China fell 0.2 percent in the month and are up only 0.2 percent on the year. Import prices with the EU are down a monthly 0.1 percent with this yearly rate at plus 3.5 percent.
A clear sign of price traction is the overall year-on-year rate for imports, at 4.8 percent and the highest since February 2012. Yet further traction is uncertain given ongoing strength in the dollar which means greater purchasing power for foreign goods and lower import prices. This report is favorable for the Federal Reserve which is now paying careful attention to controlling the upside of its 2 percent inflation target.