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

MishTalk

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%.

by Mish

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.

Crude Weekly Chart

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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.

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

Mike “Mish” Shedlock