December 2000 U.S. Import and Export Price Indexes

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- DECEMBER 2000-

The U.S. Import Price Index decreased 0.5 percent in December, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The decline followed a 0.1 percent increase in the previous month and reflected a downturn for imported petroleum prices. The Export Price Index dipped 0.1 percent in December, after posting no change in November.

From December 1999 to December 2000, import prices rose 3.5 percent after gaining 7.1 percent in the December 1998-99 period. The increase in both years was largely attributable to rising petroleum prices. The increase in export prices-up 1.3 percent for the year ended in December 2000-was the largest calendar year increase for the index since 1995 and was led by a turnaround in prices for agricultural exports.

Import Goods

The December decrease of 0.5 percent for overall import prices was highlighted by a 9.3 percent decline for imported petroleum prices, which had increased 1.6 percent in the previous month. The volatile petroleum index rose 18.8 percent for the year ended in December 2000 after surging 136.8 percent from December 1998 to December 1999. Led by natural gas prices, the index for nonpetroleum import prices rose 0.9 percent in December 2000, the largest one- month advance for the index since the monthly series began in January 1989. The index had registered little monthly movement prior to December and was up 1.4 percent for the 12-month period ended in December 2000-the first calendar year increase since 1995. From December 1998 to December 1999, nonpetroleum import prices were unchanged.

The index for industrial supplies and materials, excluding petroleum, rose 4.1 percent in December 2000; the increase was largely attributable to a 40.6 percent rise for natural gas. Over the past 12 months, the index for industrial supplies and materials, excluding petroleum, was up 11.8 percent. Prices for foods, feeds, and beverages also increased in December, up 1.6 percent, after decreasing in each of the previous three months; the index was down 4.2 percent for the year.

In contrast, all of the major finished goods indexes either decreased or posted no change in December. Furthermore, import prices for both consumer goods and capital goods dropped on an annual basis for the fifth consecutive year. In December, import prices for consumer goods were down 0.2 percent, after recording no change in each of the previous two months. For the year ended in December, the index declined 1.1 percent. Capital goods prices, which have decreased in seven of the past eight months, dipped 0.1 percent for the second month in a row. Falling prices for computers and semi- conductors led the decline in December. Over the past 12 months, the index for capital goods dropped 2.1 percent. Import prices for automotive vehicles, parts, and engines were unchanged for the second consecutive month and up 0.7 percent over the past year.

Export Goods

Prices for exports dipped 0.1 percent in December, as the decline in nonagricultural export prices countered increases for agricultural export prices. Nonagricultural export prices decreased 0.2 percent, after declining 0.1 percent in each of the previous two months. From December 1999 to December 2000, however, this index advanced 1.0 percent, similar to the 1.3 percent increase in the prior year. Led by increasing prices for grains and oilseeds, the index for agricultural exports increased for the fourth consecutive month, rising 1.2 percent in December. During the past year, agricultural export prices rose 3.1 percent, after falling on an annual basis over each of the previous four years.

The December decrease in nonagricultural export prices was largely attributable to a fuel-driven 0.8 percent decline for the nonagricultural industrial supplies and materials index. This index has decreased for three consecutive months, but, despite the recent downturn, prices for exported nonagricultural industrial supplies and materials were up 3.4 percent for the year. The export price index for consumer goods also fell in December, down 0.2 percent, after posting no change in the previous two months. Over the past 12 months, prices for consumer goods decreased 0.4 percent.

The indexes for capital goods and for automotive vehicles, parts, and engines continued to register little movement. The index for capital goods gained 0.1 percent for the second consecutive month and was up 0.3 percent for the year. Export prices for automotive vehicles, parts, and engines were unchanged last month, after dipping 0.1 percent in November. From December 1999 to December 2000, this index increased 0.6 percent.

Summary of December-to-December percent changes

Imports by Locality of Origin

The price index for imports from Japan continued to record modest movement, dipping 0.1 percent in December after remaining unchanged on average in each of the prior two months. For the year ended in December, the index edged up 0.2 percent.

The index for imports from Latin America fell in December, down 3.2 percent, reflecting the drop in petroleum prices. Over the past 12 months, however, import prices from Latin America increased 7.0 percent.

Import prices from the European Union fell for the fifth consecutive month, down 0.4 percent in December. From December 1999 to December 2000, the index fell 1.8 percent.

In contrast, import prices from Canada, which have declined only once in the past 23 months, increased 2.0 percent in December. Over the past 12 months, the index for import prices from Canada increased 11.4 percent.

Import prices for goods from the Asian Newly Industrialized Countries increased in December, up 0.5 percent after falling the same amount in each of the previous two months. The index has decreased on an annual basis over the past five years. From December 1999 to December 2000, the index fell 1.3 percent.

Import and Export Services

The import air freight index decreased 1.4 percent from September to December, following a third-quarter increase of 0.2 percent. For the year ended in December, the index fell 3.8 percent. The export air freight index also decreased in the fourth quarter, down 1.5 percent. The index, however, edged up 0.2 percent over the past 12 months.

The import air passenger index dropped 5.9 percent from September to December but gained 10.3 percent for the year ended in December. Export air passenger fares also declined in the fourth quarter, down 4.7 percent. Over the past year, the index fell 0.8 percent.

The import ocean liner freight index was unchanged over the past three months, after decreasing in the previous quarter. The index decreased 1.2 percent over the past year.