Import Prices Rising Faster, Trade Deficit In-Line

The U.S. trade balance (what has really been the trade deficit for two decades or more) came in at -$44.2 billion, and that was virtually in line with the Bloomberg consensus reading of -$44.0 billion. The range was -$41.2 billion to -$46.5 billion, so we would not expect for this to have any real market impact.

Another reading is the import and export prices, both of which came in hotter than economists were calling for. Export prices rose by 0.8%, versus the Bloomberg consensus of 0.4%. Import prices rose by 1.1%, versus the 0.7% gain that was expected by the Bloomberg consensus from economists. Bloomberg notes on import/export prices:

Import price indexes are compiled for the prices of goods that are bought in the United States but produced abroad and export price indexes are developed for the prices of goods sold abroad but produced domestically. These prices indicate inflationary trends in internationally traded products.

It is important to realize that the trade deficit is a report of August data, while the import and export prices is a reading from September. The Labor Department handled the report on import/export prices, and this may signal that prices are a tad hotter than what some investors might prefer to see. Still, much of the gain may have still been tied to energy prices.