December 1996 U.S. Import and Export Price Indexes

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-DECEMBER 1996-

The U.S. Import Price Index increased 0.1 percent in December, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The advance followed a decline of 0.2 percent in November. The U.S. Export Price Index was unchanged in December after declining in each of the six preceding months.

Dec. 1994-95 2.6 5.9 2.3 3.4 17.3 1.7 Dec. 1995-96 1.3 31.7 -1.7 -1.2 -6.9 -0.4

Import Goods

The small December increase in the import price index was attributable to price increases for both petroleum and nonpetroleum imports, up 0.3 and 0.1 percent, respectively. Import prices had declined 0.2 percent in November after rising in the three prior months, due primarily to a decline in petroleum prices in November after increases in the prior months. The December rise in nonpetroleum prices followed declines of 0.1 and 0.3 percent in November and October, respectively, and was only the second monthly increase in the past 12 months.

Prices of U.S imports were up 1.3 percent in the 12 months ended in December 1996. This compared with a 2.6 percent increase in 1995 and a 5.3 percent rise in 1994. The advance in overall import prices in 1996 was due to petroleum prices which rose 31.7 percent compared with a more modest 5.9 percent increase in 1995. The 12-month rise in petroleum prices was the largest yearly increase since 1990. In contrast, nonpetroleum imports fell over the past 12 months, down 1.7 percent compared with a 2.3 percent increase in 1995 and a 3.8 percent rise in 1994.

Nonpetroleum industrial supplies and materials led the December increase in prices for nonpetroleum imports, rising 0.6 percent. Over the past year, nonpetroleum industrial supplies and materials prices fell 2.6 percent. The import price indexes for automotive vehicles and consumer goods also rose in December, up 0.3 and 0.1 percent, respectively. Over the past 12 months, automotive vehicle prices were unchanged, while consumer goods prices were down 0.6 percent.

The index for imported capital goods fell in December--down 0.3 percent--and declined 4.0 percent over the year. The import price index for foods, feeds, and beverages was down 1.2 percent in December and 0.7 percent over the past 12 months.

Export Goods

The price index for U.S. export prices was unchanged in December as a continuing decline in the price index for agricultural exports offset a rise in prices for nonagricultural exports which continued to record little movement.

Over the 12 months ended in December 1996, export prices decreased 1.2 percent, the first time the index has declined on an annual basis in five years. The index of agricultural export prices was down 6.9 percent over the year after rising 17.3 percent in 1995; price declines in June-December 1996 offset sharp rises in prices in the spring. Nonagricultural export prices were down 0.4 percent in 1996 after rising 1.7 percent in 1995 and 4.3 percent in 1994.

The December advance in the index for nonagricultural exports was led by a 0.3 percent increase in nonagricultural industrial supplies and material prices. Prices for nonagricultural industrial supplies and materials, however, were down 2.2 percent in 1996. The index of exported consumer goods was also up in December, rising 0.2 percent. Exported automotive vehicle prices, however, were unchanged in December. Over the past 12 months, the price indexes for consumer goods and automotive vehicles rose 1.5 and 0.5 percent, respectively.

In contrast, the indexes for exported capital goods and foods, feeds, and beverages both decreased in December, falling 0.1 and 1.2 percent, respectively. Capital goods export prices were unchanged in 1996 while foods, feeds, and beverages prices were down 6.5 percent over the same period.

Summary of December to December percent changes

Imports by Locality of Origin

Prices of goods imported from Japan fell 0.4 percent for the second consecutive month. (See table 7.) The index fell 4.1 percent in 1996 after rising 0.5 percent in 1995.

The price index for imports from the Asian Newly Industrialized Countries also fell, decreasing 0.5 percent in December and 2.9 percent over the past 12 months.

In contrast, prices of imports from Canada and the European Union were up 0.3 and 0.2 percent in December, respectively. Over the past year, imports from Canada were down 0.2 percent, while imports from the European Union rose 1.5 percent.

Import and Export Services

The Import Air Freight Index continued to edge down for the fourth consecutive quarter with a 1.6 percent decline in December. Both the Atlantic and Pacific regions contributed to this price decrease by falling 0.3 percent and 2.4 percent, respectively. For the year, the Import Air Freight Index posted a 4.3 percent decline led by decreases in the Atlantic and Pacific regions.

The Import Air Passenger Fares Index decreased 2.9 percent this quarter due to a 7.0 percent drop in the price index for the Atlantic region. Gains of 7.6 percent in the Pacific region and 0.1 percent in the Latin American/Caribbean region moderated this decline. For the year, the Import Air Passenger Fares Index rose 2.1 percent with increases in the Atlantic, Pacific, and Latin American/Caribbean regions.

After increasing in three consecutive quarters, the Export Air Passenger Fares Index fell 3.1 percent in December due to price declines of 7.8 and 4.6 percent, respectively, in the Atlantic and Pacific regions. These declines were partially offset by a 26.3 percent surge in the Canadian region and a slight increase of 0.8 percent in the Latin American/Caribbean region. For the year, the Export Air Passenger Fares Index rose 3.3 percent.

The Import Crude Oil Tanker Freight Index gained 8.0 percent this quarter, mainly due to a 13.0 percent price jump in the Gulf region. Despite this quarterly increase, the Import Crude Oil Tanker Freight Index decreased 14.4 percent over the year, reflecting a 21.5 percent decline in the Gulf region.

The Import Ocean Liner Freight Index decreased 0.3 percent this quarter, reflecting a decline in the U.S. West Coast Index of 0.7 percent. A slight price increase of 0.1 percent in the U.S. East Coast Index moderated the decrease. The Import Ocean Liner Freight Index posted a 2.6 percent annual decrease due to a 5.3 percent decline in the U.S. West Coast Index.