Today's U.S. trade report revealed stronger-than-expected
Today's U.S. trade report revealed stronger-than-expected gains in both import and export prices prices. The 0.6% gain in import prices reflected a largely expected 5.9% surge in petroleum prices. Import prices ex-petroleum rose just 0.1%. The export prices gain reflected big gains in both agricultural (1.6%) and non-agricultural (0.5%) that beat assumptions. Analysts expect export prices to rise 0.1% in June, while import prices should fall 0.3%. Export price gains continue to mostly outpace import price gains, leaving a positive swing in the U.S. terms of trade as the weaker dollar into the start of the year is being mitigated to a greater degree with price boosts for exports than with imports. Export prices ex-agriculture and import prices ex-petroleum are poised for respective 2018 gains of 4% and 2% Dec/Dec, following respective gains of 2.9% and 1.4% in 2017 and 1.4% and 0.3% in 2016.