The U.S. July trade price report was weak
The U.S. July trade price report was weak, with a likely downward impact from tariffs. Analysts saw a flat reading for import prices and a 0.5% drop in export prices. Import prices were restrained by ex-petroleum prices which was offset a 0.9% petroleum import price increase. The export price decline reflected a 0.5% drop in agricultural prices, non-agricultural export prices were unchanged in July. Ex-petroleum, import prices were weak, declining 0.1%. Core price gains were also weak, with core import prices falling 0.1%, a second straight monthly decline, and export prices declining 0.2%. Analysts expect export prices to fall 0.1% in August, alongside declines of 0.2% and 0.1% respectively in import prices and an ex-petroleum import prices. Export prices ex-agriculture and import prices ex-petroleum are poised for respective 2018 gains of 3% and 1% Dec/Dec, following respective gains of 2.9% and 1.4% in 2017 and 1.4% and 0.3% in 2016. Tariffs will likely depress trade prices going forward despite upward domestic price pressure as producers absorb some of the tax impact.