March 1997 U.S. Import and Export Price Indexes

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-MARCH 1997- The U.S. Import Price Index decreased 1.4 percent in March, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The decline followed decreases of 0.8 percent and 0.3 percent in February and January, respectively, and was led by a further sharp drop in petroleum prices. The U.S. Export Price Index was unchanged in March after gaining 0.2 percent in the previous month.

Import Goods

The March decline in import prices was the largest recorded since December 1992, as petroleum prices were down 10.9 percent after dropping 7.5 percent in February. Also contributing to the March decline were nonpetroleum import prices which resumed a downward trend, falling 0.3 percent after recording no change in February. For the year ended in March, overall import prices dropped 1.6 percent, attributable to falling petroleum and nonpetroleum import prices, down 1.2 percent and 1.9 percent, respectively.

The decrease in the price index for nonpetroleum imports in March was led by a 1.3 percent decline in prices for industrial supplies and materials excluding petroleum. The decrease marked the biggest decline in this component in over six years and was primarily due to a large drop in natural gas prices. Consumer and capital goods prices were both down in March, falling 0.6 percent and 0.3 percent, respectively. The decrease in the price index for consumer goods was largely attributable to seasonal fluctuations in flower prices and a continued decline for manufactured durables. Prices for capital goods, down 0.3 percent, fell for the sixth consecutive month and have fallen in 15 of the last 16 months.

The price index for automotive vehicles, parts, and engines, however, remained stable as prices were unchanged for the second consecutive month. Over the past 12 months, this index inched up 0.1 percent. In contrast, the price index for foods, feeds, and beverages rose 2.8 percent in March, after gaining 1.9 percent in February. Higher coffee prices continued to have the largest upward impact.

Export Goods

Export prices were unchanged in March, as an increase in agricultural prices was offset by a slight decrease in nonagricultural export prices. Agricultural export prices rose 1.4 percent in March, after increasing 2.2 percent the previous month, and was led by higher prices for grains and oilseeds. In contrast, nonagricultural exports edged down 0.1 percent in March, following no change over the previous two months.

The dip in nonagricultural export prices in March was led by declining capital and consumer goods prices. The capital goods decrease, down 0.3 percent in March after falling 0.1 percent in February, was primarily due to prices for computers and semiconductors. Consumer goods prices fell 0.4 percent in March, marking the first decline since May.

In contrast, prices for autos and nonagricultural industrial supplies and materials edged up 0.2 percent and 0.1 percent in March, respectively, continuing recent trends of little or slightly upward movements.

Imports by Locality of Origin

Import prices from Japan decreased for the seventh consecutive month, falling 0.4 percent in March. (See table 7.) This index has dropped 4.9 percent over the past year, reflecting the sustained strength of the dollar versus the yen.

The index for import prices from Canada fell 1.5 percent in March, similar to the 1.6 percent decrease in February. The price index for imports from Canada was down 1.4 percent for the year ended in March.

Import prices from the European Union also fell in March, dropping 1.1 percent after decreasing 0.4 percent in February. Over the past 12 months, this index was down 1.0 percent.

In contrast, the price index for imports from the Asian Newly Industrialized countries posted an upturn in March, edging up 0.1 percent. This index had decreased in each of the previous four months, however, and was down 3.2 percent for the year ended in March.

Import and Export Services (Quarterly)

The Import Air Freight Index continued to fall for the fifth consecutive quarter, posting a 5.8 percent decrease from December 1996 to March 1997. This resulted from declines of 7.1 percent in the Atlantic region and 4.5 percent in the Pacific region. The Export Air Freight Index, which was introduced this quarter, declined 1.5 percent.

The Import Air Passenger Fares Index advanced 1.2 percent in the first quarter, after declining in the previous two. This upturn reflected price increases of 2.3 percent in the Atlantic region and 2.8 percent in the Latin American/Caribbean region and was moderated by a slight drop of 0.9 percent in the Pacific region. In contrast, the Export Air Passenger Fares Index fell 3.0 percent, due to price decreases of 5.7 percent in the Atlantic region and 2.8 percent in the Pacific region.

The Import Ocean Liner Freight Index edged down for the fourth consecutive quarter with a 0.6 percent decrease. The drop reflected decreases in the U.S. East Coast and U.S. West Coast regions of 1.2 percent and 0.3 percent, respectively.