December 2005 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.

- DECEMBER 2005 -

The U.S. Import Price Index fell 0.2 percent in December, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The decline followed a 1.8 percent decrease in November and was again led by lower petroleum prices. Export prices increased a modest 0.1 percent in December after falling 0.7 percent the previous month.

Import Goods

The recent decline in import prices came after rising through most of 2005. Petroleum prices led the December decrease in overall import prices, declining 0.9 percent after falling 2.5 percent in October and 9.2 percent in November. Prior to the recent downturn, petroleum prices increased 62.5 percent over the first nine months of 2005. Nonpetroleum prices were unchanged in December after edging up 0.1 percent in November.

Overall import prices rose 7.9 percent for the year ended in December, which followed a 6.7 percent increase over the prior 12 months, and was the largest advance over any calendar year since 1987. Despite declining the past three months, the price index for petroleum increased 42.5 percent for the year following a 30.3 percent advance in 2004. Prices for nonpetroleum imports increased 2.4 percent for the December 2004- 2005 period after rising 3.7 percent over the previous 12 months.

The price indexes for nonpetroleum industrial supplies and materials and for capital goods each declined in December, falling 0.2 percent and 0.1 percent, respectively. The drop in nonpetroleum industrial supplies and materials prices was led by lower prices for natural gas, which more than offset higher prices for metals, plastic materials, and lumber. Capital goods prices, which have not increased since April, were again driven down by a continued decline in computer prices. For the year ended in December, nonpetroleum industrial supplies and materials prices rose 11.0 percent, while capital goods prices decreased 1.1 percent.

In contrast, prices for foods, feeds, and beverages increased 1.5 percent in December, primarily because of a jump in vegetable prices. Foods, feeds, and beverages prices rose 5.1 percent over the past year.

Prices for automotive vehicles and for consumer goods were unchanged on average in December, continuing the 2005 trend of little movement. For the December 2004-2005 period, automotive vehicle prices increased 0.4 percent and consumer goods prices rose 0.5 percent.

Export Goods

Export prices ticked up 0.1 percent in December as a 0.1 percent increase in nonagricultural prices more than compensated for a 0.5 percent drop in agricultural prices. The increase in nonagricultural prices followed a 0.8 percent decline in November. Agricultural prices were down for the fourth time in the past five months.

The price index for overall export prices rose for the fourth consecutive year, increasing 2.7 percent for the year ended in December compared to a 4.0 percent advance the previous year. Nonagricultural prices advanced 2.4 percent over 2005 after increasing 5.0 percent over the December 2003-2004 period, the largest yearly increase for the index since 1988. Prices for agricultural exports, despite declining over the past five months, increased 4.8 percent over the year. In contrast, agricultural prices decreased 5.9 percent in 2004.

The price index for nonagricultural industrial supplies and materials advanced 0.2 percent in December after a sharp 2.2 percent drop in November. December prices were mixed as rising metals prices more than offset lower chemical prices. Prices for nonagricultural industrial supplies and materials trended up over most of 2005, increasing 8.3 percent overall for the year ended in December.

In contrast, each of the major finished goods areas either declined or remained unchanged in December. Consumer goods prices edged down 0.1 percent for the month, but rose 0.6 percent over the past year. The price indexes for capital goods and for automotive vehicles were unchanged in December. Capital goods prices declined 0.7 percent over the past 12 months, while prices for automotive vehicles increased 1.1 percent for the same period.

Summary of December-to-December Percent Changes

Imports by Locality of Origin

Prices of imports from Canada and from the European Union each decreased in December, falling 0.7 percent and 0.1 percent, respectively. Both indexes were led down for the second consecutive month by lower fuel prices. Despite the recent declines, over the past 12 months, import prices from Canada rose 11.7 percent and prices for imports from the European Union increased 2.6 percent.

The price indexes for imports from Japan and from China also declined in December, decreasing 0.2 percent and 0.1 percent, respectively. Both indexes have trended down throughout 2005 and fell 0.6 percent overall for the year ended in December.

In contrast, import prices from Mexico increased 0.7 percent in December following declines in each of the previous two months. Prices for imports from Mexico rose 8.2 percent over the past year.

Import and Export Services

Import air passenger fares increased 3.2 percent in December following four consecutive monthly declines. The increase was led by an 18.5 percent jump in Asian fares. The price index for export air passenger fares rose 0.4 percent in December as higher prices for Latin American and Caribbean fares more than offset declining European and Asian fares. Import air passenger fares increased 4.1 percent over the past 12 months, whereas export air passenger fares declined 4.2 percent.

Prices for import air freight fell 2.5 percent for the last quarter of 2005 after increasing 1.0 percent for the previous three-month period. The index decreased a modest 0.2 percent for the year ended in December. In contrast, export air freight prices rose 4.0 percent for the September-December period. Prices for export air freight increased for each quarter of 2005 and advanced 8.7 percent over the past year.

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.