December 1994 U.S. Import and Export Price Indexes

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-DECEMBER 1994-

The U.S. Import Price Index declined 0.2 percent in December,the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decrease followed two consecutive monthly increases of 0.7 percent and was attributable to a decline in petroleum prices. In contrast, the U.S. Export Price Index rose 0.7 percent in December, the same as the November increase. Higher agricultural export prices led the increase in overall export prices this month.

For the year ended in December, import prices were up 5.2 percent, in contrast to a 1.0 percent decrease in 1993. The rise for the import price index in 1994 was the largest annual gain since 1990. Export prices rose 3.8 percent in 1994 (the largest annual increase since 1988), compared with a 1.0 percent increase in the previous year.

Import Goods

In December, imported petroleum prices fell 3.4 percent after increasing in the previous 2 months. During the year, average monthly petroleum price movements were volatile, finishing up 18.6 percent for the 12 months ended in December which marked the first annual increase since 1990. Petroleum prices, however, are still almost 50 percent lower than their peak level in October 1990.

The index for nonpetroleum imports continued a more modest upward trend in December, rising 0.2 percent after a 0.3 percent advance in November. The price index for nonpetroleum imports was up 3.9 percent in 1994, the largest increase since 1988.

Contributing to the December price increase for nonpetroleum imports was a 0.9 percent rise in prices of industrial supplies and materials excluding petroleum -- primarily attributable to continued advances in the indexes for imported paper and paper base stocks as well as unfinished metals associated with durable goods, which increased 3.3 and 2.3 percent, respectively.

In contrast, import prices for automotive vehicles, parts, and engines were down 0.2 percent in December. Despite this decrease, the index was up 3.0 percent for the year. The indexes for capital goods and consumer goods were relatively stable in December, and both rose 1.1 percent for the year as a whole.

Export Goods

The rise in export prices was led by the recent upswing in prices for agricultural commodities, especially corn and soybeans. Agricultural commodities increased 2.4 percent in December, following a 1.6 percent increase in November. Prices for agricultural exports declined 0.2 percent in 1994 compared with a 8.3 percent increase in the previous year.

The index for nonagricultural exports continued its moderate year- long upward trend in December, rising 0.4 percent. For the year ended in December, prices for nonagricultural exports were up 4.2 percent, compared with a 0.2 percent rise in 1993, and marked the largest annual gain since 1988.

The index for nonagricultural industrial supplies and materials contributed to the price increases for nonagricultural exports, rising 1.4 percent for the month and 14.8 percent for the year ended in December. In addition, export prices for automotive vehicles, parts, and engines continued to edge up, rising 0.1 percent in December and 1.5 percent annually.

In contrast, the index for capital goods resumed its downward trend, falling 0.1 percent in December. For the year, prices for exported capital goods (which accounts for 38 percent of U.S. exports) dropped 1.1 percent. The index for consumer goods also posted a small 0.1 percent decrease in December, but edged up 0.6 percent for the year as a whole.

Summary of annual percent changes 12 months ended in December

Imports by Country or Region of Origin

Prices of Japanese imports were unchanged on average in December and posted a 3.4 percent gain for the year. In 1993, Japanese import prices rose 6.8 percent. The price index for goods from the European Community fell 0.2 percent in December, attributable to a 7.9 percent drop for nonmanufactured goods. For the year ended in December, goods from the European Community increased 4.7 percent after falling 1.4 percent on average in the previous year. The price index for imports from Canada continued to move higher in December, increasing 0.4 percent after a 1.5 percent increase in the previous month. For the year ended in December, goods from Canada increased 6.5 percent, in contrast to a 1.4 percent drop in 1993. The index for goods from the Asian Newly Industrialized Countries fell on an annual basis, dropping 0.6 percent, but had a slight upturn in December of 0.2 percent.

International Services

Both air freight price indexes posted gains in the fourth quarter. The Inbound Air Freight Index rose 1.6 percent and the Outbound Air Freight Index increased 1.0 percent. Over the year, the Inbound Air Freight Index advanced 4.0 percent, while the Outbound Air Freight Index edged up 0.8 percent.

The U.S. Carrier Air Passenger Fares and Foreign Carrier Air Passenger Fares Indexes both moved lower this quarter with declines of 6.3 percent and 6.9 percent, respectively. These declines were attributable primarily to seasonal decreases in the Atlantic region. For the year, the U.S. Carrier and Foreign Carrier Air Passenger Fares Indexes experienced modest gains of 2.2 percent and 2.6 percent, respectively.

The Inbound Crude Oil Tanker Freight Index rose sharply this quarter, up 28.2 percent, after 5 consecutive quarters of declining ocean tanker freight rates. Both the Atlantic and the Gulf regions contributed to the advance, up 17.6 percent and 38.1 percent, respectively. The Inbound Crude Oil Tanker Freight Index increased by 17.2 percent over the year, reflecting the increases this quarter.

After a slight dip in the September quarter, the Inbound Ocean Liner Freight Index increased this quarter by 0.4 percent. For the year, the Inbound Ocean Liner Index posted a 4.4 percent increase.