Year-Over-Year Import Prices at Highest Level in Five Years: Inflation Scare or the Real Deal?

In February, import prices rose 0.2% in line with the Econoday consensus. Export prices rose 0.3%, slightly more than the consensus estimate of 0.2%.

Revisions took upped January import prices from 0.4% to 0.6% and export prices from 0.1% to 0.2%.

Year-over-year import prices jumped from 3.7% to 4.6% and export prices from 2.3% to 3.1%.

Econoday cites price pressures: “An important sign of pressure comes from the overall year-on-year rate which is at 4.6 percent, its highest level in 5 years, since February 2012.”

That’s a bunch of speculative oil-related nonsense.

As discussed previously, if energy prices continue to rise, there will be price pressures. And if not, there likely won’t.

Monthly Crude Chart

Crude Weekly Chart

Those two charts explain year-over-year price pressures and upcoming month-over-month price changes.

Year-over-year inflation will look reasonably strong for some time unless there is a price collapse. The same cannot be said for month-over-month prices.

Inflation Scare or the Real Deal?

I don’t know precisely what crude will do, nor does anyone else. But with rate hikes coming, and GDP estimates diving, I highly doubt oil is about to skyrocket.

Until proven otherwise, I believe, and the charts suggest, that we are in the midst of a price inflation scare.

Related Articles

1. March 8: Wholesale Trade Inventories Decline; Revisions Announced; First Quarter GDP Troubles Brewing
2. March 7: GDPNow 1st Quarter Forecast Plunges to 1.3% Following Vehicle Sales and Factory Orders Reports
3. March 6: Factory Order Details Disappoint Again
4. March 1:  GDPNow Forecast Plunges to 1.8% Following Personal Income and Outlays Report

With the Fed hiking and GDP estimates plunging, oil does not seem poised for a lift-off.

Mike “Mish” Shedlock