The Federal Reserve may have less and less inflationary data to lend any credence to its rate hike desires. That is unfortunate by many of our views, but nothing lasts forever. Import and Export Prices were fairly miserable in the month of September.

Import prices fell by a reading of -0.1% in September. Bloomberg was calling for a -0.4% estimate. on top of the drop being less than expected, the prior month’s revision (August) was revised to -1.6% from a prior -1.8%.

Where things look exceptionally bad on the imports front is that the year over year reading was -10.7%. Economists and consumers alike should keep in mind that energy prices had not tanked yet a year ago. That greatly influenced the numbers.

Export prices were down by more than expected. September’s total export reading was -0.7% versus the -0.2% expected. It was also worse than the lowest -0.5% expected number from economists. On a year over year basis in September, the export prices were down by -7.4%.

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One thing that kept things from getting worse this month was a snap-back in energy prices.

The Federal reserve wants inflation up around 2.0%. If you start to normalize the reports, we have to consider that oil prices did not hit rock bottom until this August. That being said, the price of oil had dropped to $60 by last December, so unless oil prices tank again then we do not have to worry about the death spiral readings taking place as frequently once we get past this December.

It may not be until 2016 that the crushing deflationary numbers are no longer hitting with the same voracity, but the rest of 2016 will of course depend on how the actual commodity prices are looking in 2016.

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