July Import/Export Prices Fall Below Expectations: Insights into Fueling Factors and Economic Indicators

Import / Export price data for July was lower than the consensus estimation. Import prices were down 1.4% year over year, which was lower than the consensus expectation of a 0.9% reduction. This was the first drop in import prices since December 2021 and was largely driven by a reduction in the cost of fuel imports. Export prices were down -3.3%, which was lower than the consensus estimate of a 0.1% rise. The decline in export prices was led by reductions in the prices of agricultural goods, nonagricultural industrial supplies and materials, consumer goods, and nonagricultural foods, which offset the increases in capital goods and automotive vehicles.

Baker Hughes Rig Count showed a slight decline in North American rigs. Across both U.S. and Canada, there was a slight decline in the number of active rigs, pointing to a potential decline in domestically produced oil. While historically the Fed has largely focused on price indices that are not inclusive of energy, the Fed has recently shifted to weigh their decisions based on overall price movements, inclusive of energy. This is the second consecutive week where the U.S. oil and gas rig count has reduced.

The week ahead includes an FOMC meeting, the Philadelphia Fed’s Business Outlook, and an Industrial Production Month-over-Month data release.