December 1997 U.S. Import and Export Price Indexes

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

-DECEMBER 1997-

The U.S. Import Price Index fell 0.6 percent in December, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The decrease was attributable to the continuing decline in nonpetroleum prices, as well as the recent downturn in petroleum prices. The U.S. Export Price Index also fell in December, decreasing 0.4 percent.

IMPORTS EXPORTS Month Non- Agri- Nonagri- All Petroleum petroleum All cultural cultural Imports Imports Imports Exports Exports Exports

For the year ended in December, import prices fell 4.9 percent, compared with a 1.5 percent gain for the December 1995-96 period. The annual decrease was the largest recorded for the import price index since publication of the series began in 1983. Export prices fell 1.1 percent for the year ended in December 1997, about the same as the 1.2 percent decline over the previous 12-month period.

Import Goods

The December import price decrease of 0.6 percent was the tenth decline in the last 12 months and followed a drop of 0.5 percent in November. Nonpetroleum import prices continued a two-year downward trend, falling 0.2 percent in December. Over the past 12 months, the index for nonpetroleum imports fell 2.5 percent after declining 1.7 percent over the December 1995-96 period. Petroleum prices also contributed to the recent drop in import prices, falling 5.4 percent in December and 5.0 percent in November. The price index for petroleum imports dropped 25.5 percent for the December 1996-97 period, in contrast to a 33.8 percent increase over the previous 12-month period.

The index for imported capital goods decreased 0.3 percent for the second consecutive month. Capital goods prices fell 7.2 percent for the year ended in December, compared with a 3.8 percent decline over the previous 12-month period. Import prices for industrial supplies and materials excluding petroleum reversed trend in December, falling 0.5 percent after rising 0.6 percent in the previous month. For the year ended in December, this index was down 0.8 percent. Automotive vehicles, parts, and engines also fell in December, edging down 0.1 percent. Despite the decrease, this index was up a modest 0.5 percent over the 12 months ended in December.

In contrast, the index for foods, feeds, and beverages rose 0.7 percent last month, following declines of 0.9 percent in November and 0.8 percent in October. The turnaround was primarily attributable to a rebound in coffee prices. In addition, import prices for consumer goods edged up 0.1 percent in December. Over the past 12 months, however, the index was down 0.9 percent.

Export Goods

The price index for all exports declined for the third time in the last four months, as a decrease in agricultural export prices combined with a continuing decline in the price index for nonagricultural exports. Agricultural export prices resumed a downward trend, falling 0.8 percent in December after increasing 0.7 percent in the previous month. The agricultural index has fallen in seven of the past nine months and was down 3.0 percent for the year compared with a 6.9 percent decline during the previous year. Nonagricultural export prices, down 0.3 percent in December, fell for the fourth month in a row. The recent downturn in the index followed eight months of little or no movement. For the year ended in December, the nonagricultural export index dropped 0.9 percent. In the previous year, this index fell 0.3 percent.

The December drop in nonagricultural export prices was attributable to declining prices for capital goods and for industrial supplies and materials. The capital goods index, which accounts for more than 40 percent of aggregate exports, dropped 0.3 percent in December after posting no change in November. This index fell in three of the past four months and was down 1.5 percent for the year. Nonagricultural industrial supplies and materials fell for the fifth consecutive month, down 0.6 percent in December. Over the past 12 months this index fell 1.2 percent.

In contrast, the index for automotive vehicles was unchanged and prices for consumer goods excluding autos edged up 0.1 percent in December. Over the past 12 months, these indexes rose 0.8 and 0.9 percent, respectively.

Summary of December-to-December percent changes

Imports by Locality of Origin

Prices of goods imported from Japan fell for the fifth consecutive month, dropping 0.4 percent in December. (See table 7.) The decrease continues a two-year slide, as prices of imported Japanese goods fell 5.0 percent in 1997 and 4.1 percent in 1996.

Prices for imports from the Asian Newly Industrialized Countries also continued to decline, falling 0.5 percent in December after falling 1.1 percent in November. The recent decline has paralleled the relative strengthening of the U.S. dollar versus several Asian currencies. For the year ended in December, the index dropped 4.7 percent after falling 2.9 percent over the previous 12-month period.

The price index for imports from Canada also fell last month, decreasing 0.6 percent in December after a 0.3 percent decrease in November. Over the December 1996-97 period, the index was down 2.9 percent.

In contrast, the price index for imports from the European Union rose for the third consecutive month, up 0.2 percent on average in December. The index, however, decreased 1.7 percent over the past year.

Import and Export Services

The Import Air Freight Index decreased 2.3 percent from September to December, led by a 7.4 percent drop in the Pacific region. For the year ended in December, the Import Air Freight Index declined 9.4 percent.

The Export Air Freight Index dropped 4.3 percent from September to December. Over the past 12 months, the index decreased 7.6 percent.

The Import Air Passenger Fares Index continued a recent downward trend, posting a 6.5 percent decrease from September to December. This decline was primarily attributable to a 17.8 percent drop in the Atlantic region that was moderated by a 5.7 percent increase in the Pacific region. Over the past year, the Import Air Passenger Fares Index advanced 4.3 percent, reflecting gains in all regional indexes.

The Export Air Passenger Fares Index also fell in the fourth quarter, with a 7.9 percent decrease that was attributable to declines in all the regional indexes. The Export Air Passenger Fares Index fell 7.6 percent over the past 12 months.

December marked the seventh consecutive quarterly decrease for the Import Ocean Liner Freight Index. The index edged down 1.9 percent this quarter, as the indexes for the U.S. East Coast and U.S. West Coast regions fell 1.6 percent and 1.9 percent, respectively. For the year, the Import Ocean Liner Freight Index posted a decline of 5.2 percent.