October 2001 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.

- OCTOBER 2001-

The U.S. Import Price Index decreased 2.4 percent in October, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The decline, the largest since the Bureau began monthly publication of this index in 1989, was primarily attributable to a sharp decrease in petroleum prices. The Export Price Index also fell in October, down 0.7 percent, its largest drop since a similar decrease in January 1998. Despite the disruption in the metropolitan Washington mail service, response rates for October were not appreciably different from normal levels.

Import Goods

The 2.4 percent drop in October for import prices followed two months of comparatively little movement and brought the overall decline for the 12 months ended in October to 7.4 percent. October’s decline was led by a 15.7 percent fall in the price index for petroleum and petroleum products, the biggest decline in this component since 1991. From October 2000 to October 2001, the petroleum index dropped 32.5 percent, in contrast to a 42.9 percent increase over October 1999 to October 2000. Meanwhile, the index for nonpetroleum import prices also fell in October, down 0.4 percent. This marked the ninth month in a row this series declined and brought the total drop for the year ended in October 2001 to 3.1 percent.

For nonpetroleum imports, the October decline was led by a continuing downturn in prices for industrial supplies and materials excluding petroleum, which fell 2.6 percent. The decline, the ninth in a row, was led by lower prices for natural gas, nonferrous metals, and lumber. The index for foods, feeds, and beverages, which had edged up in the two prior months after declining earlier in the year, dipped 0.3 percent. In addition, consumer goods edged down 0.1 percent in October, primarily attributable to lower prices for diamonds.

In contrast, prices for automotive vehicles, parts, and engines, up 0.2 percent in October, rose for the second month in a row. The advance was attributable to the year-end model changeovers. The index for capital goods also edged up, 0.1 percent, marking only the second increase in this component in the past year.

Export Goods

The 0.7 percent decline in the price index for overall exports marked a resumption of the recent downward trend in this series, as the small 0.1 percent increase in September had been preceded by decreases in each of the seven prior months. For the year ended in October, export prices were down 2.1 percent. The October decrease was reflected in both major components, with agricultural prices falling 1.7 percent and nonagricultural prices dropping 0.7 percent. The decline in agricultural export prices in October was led by falling prices for soybeans and corn. The monthly decrease in nonagricultural prices was the largest since the series was first published in 1989.

The October decrease in the index for nonagricultural prices was highlighted by a sharp drop in prices for exported fuels and lubricants, down 9.7 percent, as well as smaller decreases in the prices for precious metals. In addition, the index for capital goods—led by a decline in the prices for semiconductors—fell 0.4 percent in October, the largest dip in this component in three years.

The export price index for automotive vehicles was up 0.1 percent in October, coincident with the introduction of the new model year automobiles, while prices of consumer goods, excluding autos, were unchanged.

Imports by Locality of Origin

Import prices from the Asian Newly Industrialized Countries resumed a downward trend in October, falling 0.3 percent after being unchanged in September. Prior to September, the index had declined for eight consecutive months. For the 12 months ended in October the index was down 4.6 percent.

Prices from Latin America and Canada, both heavily influenced by prices of petroleum and other raw materials, fell in October; the Latin America index dropped 3.5 percent, while prices from Canada were down 2.6 percent.

The index of prices from the European Union also was down in October, as a decrease in raw material prices more than offset an increase in prices for manufactured goods.

In contrast, prices from Japan were unchanged, on average, in October, after dipping in each of the three previous months.

ANNOUNCEMENT OF CHANGES IN THE U.S. IMPORT AND EXPORT PRICE INDEXES

Beginning with the release of January 2002 data on February 14, the Bureau of Labor Statistics will make two changes to the U.S. Import and Export Price Indexes. First, all price indexes will be reweighted to 2000 trade weights. Second, these indexes will be rebased from 1995=100 to 2000=100.

The current practice is to update the weights in these price indexes every five years. The new weights will be based on U.S. export and import shipment values for the calendar year 2000 (as reported by the Bureau of the Census) and will be used in the calculation of indexes from January 2002 forward. In addition, as a result of shifts in trade patterns, there also will be minor changes in the publication structure.

In keeping with the program’s policy of using a reference base that is the same as the weight base, all indexes will be rebased from 1995=100 to 2000=100. This impacts the level of the indexes prior to January 2002; however, it should not (except for rounding) cause any adjustments to the percent changes between different time periods.