On an annual basis, import prices rose by 1.3%, marking the strongest annual increase since July 2024. However, fuel imports remain 8.6% lower year-on-year, due to continued volatility in energy markets.
How did export prices perform?
Export prices were unchanged in November as higher non-farm export prices offset declines in agricultural goods. Agricultural export prices fell 0.4%, driven by lower soybean and fruit prices, while non-farm exports rose 0.1%, driven by capital goods and industrial materials. On an annual basis, export prices rose by 0.8%, the largest annual increase since mid-2024.
Regionally, export prices to key trading partners such as China and Japan fell in November, contributing to a weaker US trading base. For example, export prices to China fell by 0.5%, while those to Japan fell by 1.0%.
What does this mean for the markets?
The unexpected increase in import prices increases inflationary pressures, complicating the Federal Reserve’s policy outlook. Higher import costs, especially for energy, could maintain upward pressure on Treasury yields as the Fed remains vigilant on inflation.
For commodities, mixed price trends for fuel imports and agricultural exports indicate limited short-term support for gold as a safe haven. Stock markets may face headwinds, especially in sectors dependent on imported capital goods or consumer goods, as price increases weigh on profit margins.
In summary, the data indicate continued cost pressures, especially in energy markets, with modestly bearish outlooks for equities and gold. Bond yields may show upward momentum as traders digest inflation implications for Fed policy.