June 2005 U.S. Import and Export Price Indexes

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- JUNE 2005 -

Prices for U.S. imports increased 1.0 percent in June after declining 1.0 percent in May, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Higher petroleum prices more than offset a second consecutive monthly decrease in nonpetroleum prices. The price index for U.S. exports was unchanged in June after declining 0.2 percent in May.

Import Goods

Following a 1.0 percent decline in May, import prices resumed moving up in June. The increase was led by higher petroleum prices, which advanced 7.6 percent, after a 4.8 percent downturn the previous month. The decline in May petroleum prices was preceded by a 26.2 percent increase over the first four months of 2005. Nonpetroleum prices declined 0.4 percent in June, following a 0.2 percent decrease in May. The declines were the first monthly decreases since the index edged down 0.1 percent in October 2004. Nonpetroleum import prices increased 2.1 percent for the year ended in June, while overall import prices rose 7.0 percent.

The June decline in nonpetroleum import prices was partly attributable to the second consecutive 1.1 percent decrease in the monthly price index for nonpetroleum industrial supplies and materials. Those declines were a turnaround from the recent upward trend in nonpetroleum industrial supplies and materials prices, which had increased 8.6 percent in the ten months prior to May. The June decrease was led by a sharp drop in prices for natural gas, although lower metals and chemicals prices also helped to offset higher prices for building materials.

Lower prices for foods, feeds, and beverages and for consumer goods also contributed to the overall drop in nonpetroleum prices. Led by a drop in vegetable prices, the price index for food, feeds, and beverages declined 1.7 percent in June, the largest monthly decrease for the index since February 2002. Despite the decline, foods, feeds, and beverages prices rose 6.4 percent over the past year. Prices of consumer goods fell 0.1 percent last month, but increased 1.4 percent for the year ended in June.

The price indexes for capital goods and for automotive vehicles were both unchanged in June. Capital goods prices also were unchanged, on average, over the past 12 months, while prices of automotive vehicles rose 1.2 percent over the same period.

Export Goods

Export prices were unchanged in June, as a 1.2 percent increase in agricultural prices countered a slight 0.1 percent decline in nonagricultural prices. The price index of overall exports had decreased 0.2 percent in May, the first drop for the index since August 2004. Agricultural prices increased for the fourth month in a row in June and were led by higher prices for soybeans and corn, which more than offset lower vegetable prices. Despite the recent upward trend, agricultural prices declined 2.7 percent for the year ended in June. Nonagricultural prices fell for the second consecutive month after having not posted a decline since June 2004. The index rose 3.8 percent over the past 12 months, while overall export prices increased 3.2 percent for the same period.

Lower prices for nonagricultural industrial supplies and materials and for consumer goods both contributed to the recent drop in nonagricultural prices. The price index for nonagricultural industrial supplies and materials declined 0.6 percent in June after a 1.3 percent decrease in May. Notwithstanding those declines, the index increased 11.3 percent over the past year. The June drop was attributable to lower prices for chemicals and metals, which more than offset higher fuel prices. Consumer goods prices also fell for the second consecutive month in June, decreasing 0.2 percent. Prices for consumer goods still rose 1.2 percent over the past 12 months.

Capital goods prices and prices of automotive vehicles both rose 0.1 percent in June and increased 0.7 percent and 1.2 percent, respectively, over the past year.

Imports by Locality of Origin

Import prices from the European Union resumed an upward trend in June, rising 0.2 percent following a 0.2 percent decline in May. Higher petroleum prices led the turnaround. Prices of imports from the European Union advanced 5.3 percent over the past 12 months. The resumption of the upward trend in petroleum prices also impacted the price index of imports from Mexico, which rose 0.5 percent in June and 8.5 percent over the past year.

Prices of imports from Canada and from Japan were both unchanged in June. Import prices from Canada had declined 0.5 percent in May, while import prices from Japan remained unchanged for the second consecutive month after modest 0.1 percent decreases in March and April. Despite the recent declines, the price indexes of imports from Canada and from Japan both increased for the year ended in June, up 7.1 percent and 0.7 percent, respectively.

In contrast, prices of imports from China declined 0.1 percent last month after recording no change for May. The index declined 0.9 percent for the June 2004-2005 period.

Import and Export Services

Import air passenger fares increased 10.2 percent in June, led by a jump for European and Asian fares, which rose 12.7 percent and 13.4 percent, respectively. Although reflective of seasonal trends, the overall increase in import fares was the largest one-month rise since monthly publication began at the beginning of 2001. Over the past 12 months, import air passenger fares increased 4.1 percent. In contrast, export air passenger fares declined 4.5 percent after increasing 6.8 percent in May. Despite the June drop, the index was up 10.0 percent over the past 12 months.

The price index for import air freight decreased a modest 0.1 percent from March to June after increasing for each of the previous five quarters. Export air freight prices continued to trend upward, rising 3.5 percent for the second quarter of 2005. For the year ended in June, import air freight prices increased 9.4 percent and export air freight prices rose 11.1 percent.