July 2005 U.S. Import and Export Price Indexes

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- JULY 2005 -

Prices for U.S. imports rose 1.1 percent in July after a similar increase of 1.0 percent in June, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. For the second consecutive month, higher petroleum prices more than offset a decrease in nonpetroleum prices. The price index for U.S. exports advanced 0.1 percent in July following declines in May and June.

Import Goods

The 1.1 percent increase in import prices was the sixth advance in the past seven months. Petroleum prices, up 6.6 percent in July, again led overall import prices higher. The increase followed a 7.9 percent advance in June and petroleum prices rose 43.0 percent over the past year. The July price index for petroleum imports was at its highest level since publication began in 1982. In contrast, nonpetroleum prices fell a modest 0.1 percent in July, the third decline in a row. The index, however, had decreased only once over the 18 months prior to May. Nonpetroleum prices increased 2.2 percent for the year ended in July, while overall import prices rose 7.7 percent over the same period.

The July decrease in nonpetroleum import prices was led by a 0.7 percent decline in capital goods prices, the largest drop for the index since a similar decrease in October 2002. The July decrease in capital goods prices was attributable to a 2.1 percent decline in prices for computers, peripherals, and semiconductors. Despite the 0.7 percent decrease in July, capital goods prices fell only 0.5 percent over the past 12 months. The price index for consumer goods also contributed to the July decrease in nonpetroleum prices, dipping 0.2 percent. Prices of consumer goods increased 1.2 percent for the July 2004-2005 period despite the recent decline.

Prices for nonpetroleum industrial supplies and materials increased 0.7 percent in July, after declining in each of the two previous months. Higher prices for natural gas and chemicals more than offset lower building materials and metals prices. Nonpetroleum industrial supplies and materials prices increased 7.4 percent over the past 12 months.

The price indexes for foods, feeds, and beverages and for automotive vehicles were both unchanged in July. Foods, feeds, and beverages prices increased 6.2 percent over the past year, while prices for automotive vehicles advanced 1.0 percent over the same period.

Export Goods

Export prices ticked up 0.1 percent in July after declines of 0.2 percent and 0.1 percent for the previous two months. A 0.2 percent upturn for nonagricultural prices, which had fallen in May and June, more than outweighed a 0.2 percent downturn for agricultural prices. Agricultural prices had risen 7.3 percent over the four months prior to July, but were down 1.9 percent over the past 12 months. Nonagricultural prices resumed trending up in July after declining 0.7 percent over the previous two months. Nonagricultural prices and overall export prices increased 3.2 percent and 2.7 percent, respectively, over the past year.

Led primarily by higher fuel prices, the price index for nonagricultural industrial supplies and materials increased 0.8 percent in July. The July rise resumed the upward trend for the index following declines of 1.4 percent and 0.5 percent, respectively, for the two previous months. Nonagricultural industrial supplies and materials prices were up 9.9 percent over the past 12 months. The price index for automotive vehicles also increased in July, rising 0.2 percent for the month and 1.3 percent over the past year.

In contrast, capital goods prices declined 0.3 percent in July, driven by lower prices for computers, peripherals and semiconductors. Excluding computers, capital goods prices rose a modest 0.1 percent. Despite recording no monthly increases since February, overall capital goods prices were up 0.3 percent for the year ended in July.

The price index for consumer goods was unchanged in July following modest declines in May and June. Consumer goods prices were up 0.7 percent over the past year.

Imports by Locality of Origin

Import prices from Canada and from Mexico were up 1.1 percent and 1.5 percent, respectively, in July; the advance for both indexes was largely attributable to higher fuel prices. Both increases were the largest since March. Prices of imports from Canada advanced 8.0 percent over the past 12 months, while import prices from Mexico increased 9.6 percent over the same period.

The price index of imports from the European Union declined 0.3 percent in July as a 0.4 percent drop in manufactured goods more than offset a petroleum-driven 3.0 percent increase in nonmanufactured goods. Import prices from Europe rose 4.8 percent for the year ended in July.

Prices of imports from China and from Japan declined as well in July, decreasing 0.2 percent and 0.1 percent, respectively. The drop in import prices from China followed a modest 0.1 percent decline in June and the index decreased 1.2 percent over the past year. Import prices from Japan fell 0.1 percent in July, the fourth such decline over the past five months. Despite those recent declines, the index increased 0.4 percent for the July 2004-2005 period.

Import and Export Services

Import air passenger fares increased 3.0 percent in July following a 10.2 percent jump in June. The July increase was led by a 6.4 percent rise in Asian fares and a 7.4 percent advance in Latin American and Caribbean fares. Notwithstanding the recent increases, import air passenger fares rose a modest 4.3 percent over the past year. Export air passenger fares increased 8.1 percent last month following a 4.5 percent drop in June and were up 13.7 percent for the year ended in July.