March 2006 U.S. Import and Export Price Indexes

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- MARCH 2006 -

The U.S. Import Price Index decreased 0.4 percent in March, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The decline followed a similar 0.5 percent drop in February. In contrast, export prices increased for the fourth consecutive month, rising 0.2 percent in March.

Import Goods

Import prices fell for the second consecutive month in March after increasing 1.2 percent in January. The price indexes for both nonpetroleum and petroleum imports contributed to the overall decline in import prices, but excluding all fuels, import prices actually increased a modest 0.1 percent. Petroleum prices fell 0.7 percent in March, the fifth decline in the past six months. Despite the recent trend, however, the price index of petroleum imports rose 22.6 percent over the year ended in March. Nonpetroleum prices decreased 0.3 percent in March, driven down in part by a sharp decline in natural gas prices. Over the past 12 months, prices of nonpetroleum imports increased 1.1 percent while overall import prices advanced 4.5 percent.

A 1.3 percent decline in nonpetroleum industrial supplies and materials prices was the largest contributor to the decrease in nonpetroleum prices, as the drop in natural gas prices more than offset higher metals prices. Prices for nonpetroleum industrial supplies and materials increased 7.3 percent over the past year. The price indexes for consumer goods and capital goods also fell in March, decreasing 0.2 percent and 0.1 percent, respectively. Consumer goods prices declined 0.3 percent over the past 12 months, while prices for capital goods fell 1.5 percent for the same period.

In contrast, foods, feeds, and beverages prices increased 0.4 percent in March after declining 2.1 percent the previous month. A turnaround in vegetable prices, which had declined sharply in February, led the increase. Prices for foods, feeds, and beverages rose 1.0 percent for the year ended in March.

The price index for automotive vehicles was unchanged in March and up 0.4 percent over the past 12 months.

Export Goods

Export prices rose 0.2 percent in March after ticking up 0.1 percent the previous month. The March increase was led by a 0.2 percent advance in nonagricultural prices, which more than offset a 0.2 percent decline in agricultural prices. The price index for agricultural exports continued a recent downward trend but increased 0.5 percent for the year ended in March. Over the past year, nonagricultural prices increased 2.3 percent while overall export prices rose 2.2 percent.

The advance in nonagricultural prices was led by increases in the price indexes for both nonagricultural industrial supplies and materials and capital goods, up 0.5 percent and 0.2 percent, respectively. Nonagricultural industrial supplies and materials prices increased 7.7 percent over the past 12 months, and in March were driven by higher prices for fuels and metals which more than offset lower chemicals prices. Capital goods prices increased for the third time in the past four months, but declined 0.3 percent for the year ended in March.

Prices for consumer goods decreased 0.3 percent in March, the largest monthly decline since February 2002. The March decline was led by a 0.6 percent drop in manufactured durables prices. Despite the drop, consumer goods prices rose 0.4 percent for the March 2005-2006 period.

Automotive vehicle prices were unchanged for the second consecutive month in March and advanced 0.8 percent over the past 12 months.

Imports by Locality of Origin

March import prices from Canada and from the European Union decreased 1.8 percent and 0.2 percent, respectively, led by lower fuel prices. The decline in the prices of imports from Canada followed a 2.1 percent drop in February which was the largest monthly decrease for the index since April 2003. Notwithstanding the recent declines, import prices from Canada increased 4.7 percent for the year ended in March, while prices of imports from the European Union rose 2.3 percent.

The price index of imports from China fell for the fourth consecutive month, edging down 0.1 percent in March. Import prices from China decreased 0.4 percent over the past 12 months.

Prices of imports from Mexico and from Japan were unchanged in March. Import prices from Mexico rose 1.5 percent over the past year while prices of imports from Japan fell 0.8 percent for the same period.

Import and Export Services

Import air passenger fares rose 0.2 percent in March, led by a 0.3 percent advance in European fares. The index rose 4.5 percent for the year ended in March. In contrast, export air passenger fares decreased for the first time in four months, falling 3.0 percent in March. The index declined 4.0 percent over the March 2005-2006 period.

The price index for import air freight declined 0.4 percent in March following a 2.3 percent increase in February. The decrease was driven by a 0.4 percent drop in European air freight prices. Despite the decline, import air freight prices rose 0.5 percent over the past year. Export air freight prices increased 0.2 percent in March and declined 9.7 percent over the past 12 months.

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

The U.S. Import and Export Price Indexes classified by the Standard International Classification System (SITC), currently found in Tables 7 and 8, will no longer be published due to budget constraints beginning with the release of July 2006 data on August 11.