August 2006 U.S. Import and Export Price Indexes

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- AUGUST 2006 -

The U.S. Import Price Index rose 0.8 percent in August, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The August increase was led by a 2.3 percent advance in petroleum prices, although a 0.5 percent rise in nonpetroleum prices was also a contributing factor. Export prices increased 0.4 percent for the second consecutive month in August.

Import Goods

Import prices increased 0.8 percent in August, compared to a 1.0 percent rise in July. Petroleum prices rose 2.3 percent in August, and were up 25.9 percent over the past five months. Nonpetroleum prices also increased in August, rising 0.5 percent. For the year ended in August, prices for nonpetroleum imports rose 2.7 percent while overall import prices advanced 6.6 percent.

The August increase in nonpetroleum prices was led by a 1.8 percent rise in the price index for nonpetroleum industrial supplies and materials, which resumed an upward trend following a 0.9 percent downturn in July. The index increased 11.4 percent over the past 12 months. The August increase in nonpetroleum industrial supplies and materials prices was driven by higher natural gas and unfinished metals prices which more than offset declining prices for chemicals and building materials. A 2.5 percent advance in foods, feeds, and beverages prices in August also contributed to the rise in nonpetroleum prices. The increase was the largest one-month jump in the index since March 2005, and prices for foods, feeds, and beverages rose 6.0 percent over the past year.

Price indexes for each of the major finished goods areas recorded little movement in August. Capital goods prices rose a modest 0.1 percent while the price indexes for consumer goods and automotive vehicles were both unchanged. For the August 2005-2006 period, consumer goods prices and prices for automotive vehicles increased, up 0.7 percent and 0.6 percent, respectively, while capital goods prices decreased 0.3 percent.

Export Goods

Export prices rose 0.4 percent in August as higher prices for both agricultural exports and nonagricultural exports contributed to the increase. Prices for agricultural exports advanced for the fourth consecutive month, rising 1.0 percent in August. Higher prices for cotton, corn, and other agricultural foods more than offset lower wheat and soybean prices. Led by the increases in the past four months, agricultural prices rose 3.5 percent for the year ended in August. Nonagricultural prices continued a steady upward trend, rising 0.4 percent in August and 5.3 percent over the past 12 months. Overall export prices advanced a similar 5.2 percent for the year ended in August.

The August increase in nonagricultural prices was mostly driven by a 1.5 percent advance in the price index for nonagricultural industrial supplies and materials, which was attributable to higher prices for metals, fuels, and chemicals. Nonagricultural industrial supplies and materials prices rose 15.4 percent for the year ended in August. A 0.2 percent increase in consumer goods prices also contributed to the August rise in nonagricultural prices. Prices for consumer goods advanced 2.4 percent over the past year.

In contrast, capital goods prices fell 0.3 percent in August as prices for computers, peripherals, and semi-conductors declined 1.8 percent. Excluding computers, capital goods prices rose 0.2 percent. Despite the August decline, overall capital goods prices increased 0.5 percent over the past 12 months.

The price index for automotive vehicles was unchanged in August and up 1.4 percent for the August 2005-2006 period.

Imports by Locality of Origin

Import prices from Canada and from Mexico both rose 1.7 percent in August. In each case, the increase was led by higher fuel prices. The price index for imports from Canada rose 8.3 percent for the year ended in August, while prices for imports from Mexico increased 9.5 percent over the same period.

Prices for imports from Japan and from China also advanced in August, each rising 0.1 percent for the month. The upturn in import prices from Japan partially offset a 0.2 percent decrease in July, although the index was down 1.3 percent over the past 12 months. Import prices from China recorded a second consecutive 0.1 percent increase after trending downward over most of the past year. The index declined 1.0 percent over the August 2005-2006 period.

The price index for imports from the European Union was unchanged in August after rising in each of the previous three months. Prices for imports from the European Union increased 5.9 percent over the past year.

Import and Export Services

Import air passenger fares declined 0.8 percent in August, the first monthly decrease for the index since February. Despite the August decrease, import air passenger fares rose 5.6 percent over the past year. In contrast, export air passenger fares increased 5.2 percent for the second consecutive month. The August rise was driven by a sharp advance in Japanese fares. Notwithstanding the recent increases, overall export air passenger fares fell 0.5 percent for the year ended in August.

The price indexes for import air freight and export air freight moved in opposite directions in August, declining 0.7 percent in the case of import air freight prices while prices for export air freight increased 0.9 percent. The August movement for both indexes followed declines in July.