February 2006 U.S. Import and Export Price Indexes

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- FEBRUARY 2006 -

The U.S. Import Price Index declined 0.5 percent in February, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The decrease followed a 1.4 percent increase in January and was impacted by lower prices for both nonpetroleum and petroleum imports. Export prices were unchanged for the month after rising 0.7 percent in January.

Import Goods

Import prices decreased 0.5 percent in February following a 1.4 percent increase the previous month that was driven by higher petroleum prices. Decreases for both nonpetroleum prices and petroleum prices, down 0.5 percent and 0.7 percent, respectively, contributed to the overall downward movement in import prices. In contrast to the first three quarters of 2005, petroleum prices declined in four of the past five months, the exception being a 6.9 percent increase in January. Despite the recent trend, petroleum prices rose 40.8 percent over the past year. In addition, the price indexes for nonpetroleum imports and overall imports also increased for the year ended in February, rising 1.8 percent and 7.4 percent, respectively.

The February decrease in nonpetroleum prices was led by a 2.2 percent decline in the price index for nonpetroleum industrial supplies and materials. That decrease in turn was led by a sharp drop in natural gas prices. Excluding all fuels, import prices increased 0.2 percent and prices for industrial supplies and materials rose 1.4 percent. A 1.7 percent decrease in foods, feeds, and beverages prices, driven by lower prices for vegetables, also contributed to the overall decline in nonpetroleum prices. The decrease in foods, feeds, and beverages prices was the first since July and the index rose 4.1 percent for the February 2005-2006 period.

In contrast, prices for capital goods and for automotive vehicles increased in February, rising 0.2 percent and 0.1 percent, respectively. The February advance in capital goods prices was the first monthly increase since April 2005, as the index declined 1.3 percent over the past 12 months. The increase in automotive vehicles prices was the first advance in four months, and the index rose 0.4 percent for the year ended in February.

The price index for consumer goods was unchanged in February and down 0.4 percent over the past year.

Export Goods

Export prices were unchanged in February as a 1.1 percent decline in agricultural prices offset a 0.1 percent uptick in the price index for nonagricultural exports. The drop in agricultural prices was the third decrease in the past four months. Lower prices for soybeans and vegetables contributed to the February decline. Despite the recent downward trend, agricultural prices rose 4.2 percent over the past 12 months. Prices for nonagricultural exports and for overall exports each increased 2.6 percent for the year ended in February.

A 0.3 percent increase in nonagricultural industrial supplies and materials prices led the overall increase in prices for nonagricultural exports and was driven mostly by higher metals prices. The advance in nonagricultural industrial supplies and materials prices continued the recent upward trend for the index, which rose 8.5 percent over the past year. Increases in the price indexes for consumer goods and for automotive vehicles also contributed to the February increase in nonagricultural prices. Consumer goods prices increased 0.3 percent in February after rising 0.5 percent the previous month. Automotive vehicle prices also rose for the second consecutive month, up 0.1 percent following a 0.3 percent advance in January. For the year ended in February, consumer goods prices and prices for automotive vehicles increased 1.1 percent and 1.2 percent, respectively.

In contrast, capital goods prices edged down 0.1 percent in February following increases of 0.1 percent and 0.2 percent the two previous months. The index declined 0.7 percent over the past year.

Imports by Locality of Origin

Prices for imports from Canada and from Mexico declined in February, decreasing 2.1 percent and 1.2 percent, respectively. The drop in import prices from Canada was the largest one-month decline for the index since April 2003. Despite the downturns in February, the price indexes for import prices from Canada and from Mexico were both up over the past 12 months, rising 9.1 percent and 5.0 percent, respectively.

In contrast, prices of imports from the European Union increased 0.4 percent in February as a 0.4 percent increase in manufactured prices more than offset a 0.7 percent decline in nonmanufactured prices. Import prices from the European Union rose 2.9 percent for the year ended in February.

The price indexes of imports from Japan and from China were both unchanged in February and down 0.9 percent and 0.4 percent, respectively, over the past year.

Import and Export Services

Import air passenger fares decreased a modest 0.1 percent in February as lower Asian and Latin American fares offset a 1.2 percent increase in European fares. In contrast, export air passenger fares increased 1.7 percent, led by higher European fares and Asian fares. Both import air passenger fares and export air passenger fares rose over the past 12 months, increasing 4.2 percent and 0.2 percent, respectively.

Prices for import air freight increased 3.7 percent in February, a turnaround from the 1.8 percent decline in January. Higher European and Asian air freight prices contributed to the February increase. Export air freight prices also turned around from January, increasing 1.5 percent in February following a 0.3 percent drop the previous month.