November 2005 U.S. Import and Export Price Indexes

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- NOVEMBER 2005 -

Import prices decreased 1.7 percent in November, the Bureau of Labor Statistics of the U.S. Department of Labor reported today, following a 0.3 percent increase in October. Falling petroleum prices led the overall decrease, although nonpetroleum prices also declined. The U.S. Export price index decreased 0.9 percent in November after increasing 0.7 percent the previous month.

Import Goods

The 1.7 percent decline in import prices was only the second monthly decrease in 2005 and the largest one-month drop since April 2003. The November decrease was largely driven by an 8.0 percent decline in petroleum prices, which had dipped 1.0 percent in October. Despite the recent decreases, petroleum prices were up 30.8 percent over the past year. Nonpetroleum prices also fell in November, decreasing 0.2 percent following 0.9 percent increases in September and October. Prices for nonpetroleum imports rose 2.6 percent for the year ended in November while overall import prices increased 7.0 percent over the same period.

The turnaround in nonpetroleum import prices resulted from lower prices for both consumer goods and for nonpetroleum industrial supplies and materials. The price index for consumer goods decreased 0.2 percent in November, paralleling the appreciation of the U.S. Dollar versus most foreign currencies. November prices for nonpetroleum industrial supplies and materials also declined 0.2 percent, as downturns in prices for natural gas, building materials, and chemicals more than offset higher metals prices. Despite the November declines, consumer goods prices increased 0.8 percent over the past 12 months, while prices for nonpetroleum industrial supplies and materials advanced 11.5 percent.

Import prices for capital goods, for automotive vehicles, and for foods, feeds, and beverages were all unchanged in November. Capital goods have recorded only one monthly increase since January and declined 0.7 percent over the past year. In contrast, automotive vehicle prices and prices for foods, feeds, and beverages rose over the past 12 months, increasing 0.5 percent and 4.4 percent, respectively.

Export Goods

Export prices fell 0.9 percent in November, the first monthly decline since August and the largest one-month drop in nearly 14 years. Both the price indexes for agricultural goods and for nonagricultural goods decreased in November, falling 0.3 percent and 0.9 percent, respectively. Agricultural prices declined for the third time in the past four months, but an upward trend over the first half of 2005 led the index up 4.1 percent for the year ended in November. The decrease in nonagricultural prices followed increases of 1.0 percent in September and 0.7 percent in October, and the index rose 2.2 percent over the past year. Overall export prices also increased for the November 2004-2005 period, rising 2.4 percent.

The decline in nonagricultural prices was led by lower prices for nonagricultural industrial supplies and materials, although a decline in capital goods prices also contributed to the decrease. The price index for nonagricultural industrial supplies and materials fell 2.6 percent in November, driven mostly by a 17.3 percent drop in fuel prices. Despite the November decline, fuel prices were 22.9 percent higher than the same time a year ago, and prices for nonagricultural industrial supplies and materials increased 7.8 percent over the same period. Capital goods prices decreased 0.2 percent in November and 0.7 percent over the past 12 months, in each case led by continued price declines for computers.

The price indexes for automotive vehicles and for consumer goods were unchanged in November. Over the past 12 months, automotive vehicle prices advanced 1.1 percent, and prices for consumer goods rose 0.8 percent.

Imports by Locality of Origin

Import prices from Canada declined 1.1 percent in November, led by lower petroleum prices. The November decline was the first downward movement for the index since May and only the second monthly drop recorded in 2005. Notwithstanding the decrease, prices of imports from Canada increased 11.9 percent over the past year.

The price indexes for imports from Mexico and from the European Union were also impacted by lower petroleum prices in November, declining 1.1 percent and 0.7 percent, respectively. For the year ended in November, prices of imports from Mexico increased 5.2 percent, while import prices from the European Union rose 3.1 percent.

Prices of imports from China edged down 0.1 percent in November following a modest 0.2 percent increase in October. The index declined 0.5 percent over the past 12 months. Import prices from Japan also fell, decreasing 0.2 percent in November and 0.1 percent over the past year.

Import and Export Services

Import air passenger fares decreased 4.9 percent in November, the fourth consecutive monthly decline for the index. For the second month in a row, the decrease was led by seasonal declines in European fares, but despite the recent downward trend, the index increased 4.4 percent for the year ended in November. Export air passenger fares fell 5.7 percent in November and 1.6 percent over the past 12 months. Similar to imports, the November decline primarily resulted from lower European fares.

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

Beginning with the release of January 2006 data on February 16, in addition to the existing tables, the U.S. Import and Export Price Indexes will also be published by the North American Industrial Classification System (NAICS). The new NAICS index series will begin with December 2005, which will be set equal to 100. In addition, all of the services indexes currently found in tables 8-11 will be published on a monthly basis and displayed in one composite table.