March 2005 U.S. Import and Export Price Indexes

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- MARCH 2005 -

The U.S. Import Price Index rose 1.8 percent in March, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The increase was the largest monthly advance since January 2003 and was again driven by higher petroleum prices. U.S. export prices increased 0.7 percent in March after recording no change the previous month.

Import Goods

Import prices rose 1.8 percent in March, following increases of 0.8 percent and 0.6 percent the two previous months. For March, higher petroleum prices again led the overall increase in import prices, rising 10.6 percent for the month. The price index for petroleum increased 4.6 percent and 2.3 percent in February and January, respectively, and rose 36.1 percent over the past 12 months. Nonpetroleum prices also rose in March, increasing 0.3 percent, following 0.1 percent and 0.3 percent advances in the two prior months. Prices of nonpetroleum imports were up 2.9 percent for the year ended in March. Overall import prices increased 7.1 percent over the same period.

Higher prices for nonpetroleum industrial supplies and materials and for foods, feeds, and beverages led the increase in nonpetroleum prices. The price index for nonpetroleum industrial supplies and materials increased 1.1 percent in March, resuming the upward trend for this index following a modest 0.3 percent decline in February. Rising prices for building materials, metals, natural gas, and chemicals all contributed to the March advance. Prices for foods, feeds, and beverages rose 3.4 percent in March, primarily the result of higher vegetable prices. For the year ended in March, nonpetroleum industrial supplies and materials prices and foods, feeds, and beverages prices increased by similar amounts, rising 11.1 percent and 9.7 percent, respectively.

In contrast, prices for each of the major finished goods areas either decreased or were unchanged in March. Consumer goods prices declined 0.4 percent for the month, the first decrease for the index since last August. Despite the March drop, prices for consumer goods increased 1.0 percent over the past 12 months. The price index for capital goods decreased for the second consecutive month, dipping 0.1 percent after a similar 0.1 percent decline in February. For the year ended in March, capital goods prices fell 0.9 percent. Prices for automotive vehicles were unchanged for the third month in a row, but increased 1.4 percent over the past year.

Export Goods

Export prices rose 0.7 percent in March with both agricultural prices and nonagricultural prices contributing to the increase. Prices for agricultural exports advanced 3.7 percent, the largest increase for the index since November 2003. The turnaround of the recent declining trend for agricultural prices, down 8.1 percent over the past year, was led primarily by higher soybean prices. Nonagricultural prices, which have declined only once over the past year, rose 0.4 percent in March after a 0.1 percent rise in February. Prices for nonagricultural exports increased 4.6 percent for the year ended in March, leading the 3.3 percent rise in overall export prices over that period.

The March increase in nonagricultural prices was driven by a 1.2 percent advance in the price index for nonagricultural industrial supplies and materials. That increase was led by higher fuel prices. Nonagricultural industrial supplies and materials prices have trended upward for the past year and a half and rose 14.1 percent over the past 12 months.

For the second consecutive month, the price indexes for the major finished goods categories recorded little movement. Prices for capital goods, which account for over forty percent of overall exports, decreased 0.1 percent in March. Despite the modest decline, capital goods prices increased 0.4 percent for the March 2004-2005 period. Automotive vehicle prices rose 0.1 percent in March, while prices for consumer goods were unchanged over the same period. For the year ended in March, the price indexes for automotive vehicles and for consumer goods both increased 1.4 percent.

Imports by Locality of Origin

Import prices from Mexico and from Canada were up in March, jumping 2.7 percent and 2.0 percent, respectively. Higher fuel prices contributed to the increase for both indexes. Over the past 12 months, prices for imports from Canada rose 9.0 percent while prices for imports from Mexico advanced 6.8 percent. The price index for imports from the European Union also increased in March, rising a modest 0.2 percent. Import prices from the European Union rose 6.0 percent for the year ended in March.

In contrast, prices for imports from Japan and from China recorded little movement in March. Import prices from Japan remained unchanged in March after a 0.1 percent uptick in February, while the price index for imports from China fell 0.1 percent in March following no change in each of the two previous months. Over the past 12 months, prices for imports from Japan rose 0.8 percent whereas prices for imports from China declined 0.6 percent.

Import and Export Services

Import air passenger fares declined a modest 0.1 percent in March, the third consecutive month the index was down. The decrease was led by a 0.3 percent drop in European fares. The index for export air passenger fares rose 1.3 percent in March following a 4.6 percent decline the previous month. Over the past 12 months, import fares rose 6.2 percent while export fares increased 10.6 percent.

Prices for import air freight rose 1.5 percent for the first quarter of 2005 as higher air freight prices from Asia more than offset a decline in the price of air freight from Europe. Overall, import air freight prices increased 9.9 percent for the year ended in March. Export air freight prices edged up 0.1 percent for the December-March quarter and increased 9.4 percent over the past year.