June 1998 U.S. Import and Export Price Indexes

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-JUNE 1998-

The U.S. Import Price Index declined 0.5 percent in June, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The decrease marked the eighth consecutive month that this index has declined. The U.S. Export Price Index fell 0.6 percent in June, resuming a trend of declining prices following a 0.1 percent increase in May.

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

Import Goods

The June drop in import prices was attributable to declines for both petroleum and nonpetroleum import prices. For the year ended in June, overall import prices fell 5.6 percent. Prices for petroleum imports declined 3.9 percent in June, resuming a downward trend for the year after slight increases of 0.1 percent and 0.5 percent in May and April, respectively. Over the June 1997-98 period, the index of imported petroleum prices fell 28.8 percent. The price index of nonpetroleum imports decreased 0.3 percent in June and has declined or posted no change in each of the past 12 months. Over the year, the index was down 3.6 percent.

The June decrease in nonpetroleum import prices was led by the price indexes of nonpetroleum industrial supplies and materials and of capital goods, down 1.0 percent and 0.6 percent, respectively. Prices for nonpetroleum industrial supplies and materials fell in six of the last seven months and were down 4.5 percent for the year ended in June. Imported capital goods prices have declined consistently since the middle of 1995 and fell 6.9 percent over the past 12 months. The price index of imported consumer goods also decreased, down 0.1 percent in June and 1.3 percent over the June 1997-98 period.

In contrast, the price indexes for imported foods, feeds, and beverages and for automotive vehicles both increased in June, rising 0.5 percent and 0.1 percent, respectively. For the year ended in June, imported foods, feeds, and beverages prices fell 4.9 percent, while automotive vehicle prices rose 0.4 percent.

Export Goods

Price declines in both nonagricultural and agricultural exports contributed to the 0.6 percent decline in overall export prices in June. Over the last 12 months, the index of export prices fell 3.3 percent. Nonagricultural export prices fell 0.5 percent in June, the largest monthly decline in this index since November 1989. The index posted a decline or no change in each of the last 12 months and was down 2.7 percent over that period. Prices for agricultural exports fell 0.2 percent in June after rising 1.0 percent in the previous month. Despite the upturn in May, the index was still down 8.3 percent for the year ended in June.

Price declines were widespread for nonagricultural exports in June, led by a 0.8 percent decrease in the price index of capital goods. The drop in capital goods prices was the largest monthly decline since the index was first published monthly in 1989. For the year ended in June, exported capital goods fell 2.7 percent. The price indexes of nonagricultural industrial supplies and materials and of consumer goods also declined in June, down 0.7 percent and 0.3 percent, respectively. The drop in prices for nonagricultural industrial supplies and materials was the eleventh in a row. Overall, the index fell 5.5 percent for the past year, while exported consumer goods prices posted no change.

The price index of exported automotive vehicles was unchanged in June. Over the past 12 months, the index rose 0.2 percent.

Imports by Locality of Origin

The price index of imports from the Asian Newly Industrialized Countries continued to decline in June, down 1.2 percent. The decrease was similar to the May decline and marked the seventh time in the last eight months that this index posted a monthly decline of at least 0.8 percent. For the year ended in June, the index was down 8.8 percent. (See table 7.)

Prices for imports from Japan also continued a downward trend, falling 0.7 percent in June. Over the past 12 months, the index was down 4.8 percent.

The import price indexes for both Canada and Latin America posted declines in June, decreasing 1.0 percent and 0.3 percent, respectively. The index for imports from Canada was down 2.9 percent from a year ago.

In contrast, the price index for imports from the European Union rose in June, up 0.3 percent. Despite increasing in the past two months, the index was down 1.0 percent for the year ended in June.

Import and Export Services

The import price index for air freight rose 1.2 percent from March to June. The increase followed three consecutive quarterly declines. Despite the slight upturn in the June quarter, the index was still down 9.8 percent over the past year. In contrast, the price index of export air freight fell 0.4 percent from March to June. For the year ended in June, exported air freight prices declined 3.4 percent.

The import index for air passenger fares rose 9.0 percent from March to June, led by an 18.6 percent rise in the index of air passenger fares from the Atlantic region. Import air passenger fares from the Pacific region also contributed to the increase, rising 7.7 percent in the second quarter. The export air passenger fares index rose a more modest 0.6 percent from March to June.

The import index for ocean liner freight rose 8.0 percent from March to June, largely offsetting declines in the previous eight quarters. The increase was primarily led by a 12.2 percent gain in the U.S. West Coast region.