Import Prices Cast A Bad Spell On Next Week's CPI

Friday, June 09, 2006

A much higher than expected jump in import prices in April casts a bad spell on next week's CPI figures.
Import prices rose 1.6% (2.1%), recording the two sharpest gains in 16 years in the past two months.
Even after taking out fuel, non-fuel import prices rose 0.7% month-on-month. Fuel import prices rose 11.5% in April and are expected to rise again this month. I wonder if this report will spark renewed inflation talk. The consensus number had projected a 0.7% rise only.
Markets rather focused on a smaller than expected gap in the trade balance which has climbed in absolute terms nevertheless. The April trade deficit came in at $63.4 billion, $1.6 billion more than in March, but below consensus expectations of $65 billion.
Well, if that is such good news...


Wikinvest Wire