The U.S. September trade price report
The U.S. September trade price report revealed a 0.2% import price rise thanks to a 2.3% petroleum price increase attributable to the Saudi drone attack, and a -0.2% export price drop led by a big -1.8% decline for agricultural export prices. Analysts saw a largely expected -0.1% September import price drop ex-petroleum, but a slightly weaker than expected -0.1% decline for export prices ex-agriculture. Core prices were flat for imports but fell -0.1% for exports, with a headwind since August from the resurgence of the U.S.-China trade war, alongside the associated rise in the dollar and drop in trade-sensitive prices. "Trade war" fears generally depress the trade price measures, which are "pre-tax," as producers absorb part of the hit from higher tariff costs. Heightened fear also translates to assumed demand destruction, with associated global growth downgrades. Analysts saw a surge in trade war fear in May, followed by big May and June trade price declines. Now analysts're seeing another bout of downward trade price pressure with the start of new 10% tariffs in September on many remaining imports from China, to be followed by further tariff increases in October and December. Overall, today's report is consistent with the generally weak September trajectory for most of the U.S. inflation gauges.