Import and export prices are both beginning to move higher, up 0.6 percent for each in both May and April. Year-on-year rates are rising notably, suddenly above 4 percent at 4.3 percent for imports and 4.9 percent for exports. These are the hottest yearly readings since the easy comparisons early in the expansion, in 2011.
Oil is the major factor on the import side with crude up 6.7 percent in the month and helping to feed a 2.5 percent rise in industrial supplies. But durables are also higher, up 1.4 percent and getting a boost from imported iron and steel where tariffs are in effect and which rose 1.5 percent in May following 3.7 and 2.6 percent gains in April and March. Aluminum import prices, also the subject of tariffs, jumped 5.1 percent in May following mixed results in the prior two months.
On the export side agricultural prices are a big factor in May, up 1.6 percent in the month. Export prices for industrial supplies, again affected by oil, also rose 1.6 percent following April's 1.3 percent gain.
What's not showing any pressure, and what is a reminder of the soft results in Tuesday's consumer price report, are prices for finished goods, whether imports or exports. Monthly change across these readings shows either marginal gains or marginal declines with year-on-year gains averaging only 1.0 percent.
By country, import prices with Canada are going up the most, 1.9 percent higher in May for a year-on-year 8.1 percent. Import prices from Europe rose 0.4 percent in the month with this year-on-year gain at 4.3 percent. These are offset, however, by very weak prices from China, up 0.1 percent in the month for a yearly gain of only 0.3 percent, and Japan, also up only 0.1 percent with this yearly rate at 0.2 percent.
Today's report is a memorable one for this series. Price data below the consumer level are showing sudden acceleration in what underscores yesterday's FOMC rate hike and increased forecasts for rate hikes to come.