September 2006 U.S. Import and Export Price Indexes

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- SEPTEMBER 2006 -

The U.S. Import Price Index fell 2.1 percent in September, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The decline was the first in six months and was driven by a 10.3 percent drop in petroleum prices. Export prices decreased 0.5 percent in September, the first decline for the index since November 2005.

Import Goods

Prices for overall imports fell 2.1 percent in September, the largest one- month decrease in the index since a 3.1 percent drop in April 2003. The decline was led by a 10.3 percent decrease in petroleum prices, which had been up in five of the previous six months. The September decrease in petroleum prices was the largest monthly drop since the index fell 11.4 percent in December 2004. In contrast, nonpetroleum prices edged up 0.1 percent in September, the sixth consecutive month the index increased. For the year ended in September, the price index for nonpetroleum imports rose 2.0 percent, the same increase as overall import prices for the September 2005-2006 period.

The modest September increase in nonpetroleum prices was primarily driven by a 0.4 percent advance in prices for nonpetroleum industrial supplies and materials. A 3.1 percent increase in unfinished metals prices led the advance in prices for nonpetroleum industrial supplies and materials, with higher prices for building materials and textile supplies also contributing. Partially offsetting those increases were decreasing prices for natural gas and chemicals. The price index for nonpetroleum industrial supplies and materials rose 6.6 percent over the past 12 months. Prices for foods, feeds, and beverages also increased, up 0.4 percent in September and 6.3 percent over the past year.

More modest increases in the price indexes for consumer goods and automotive vehicles also contributed to the September advance in nonpetroleum prices. Consumer goods prices and prices for automotive vehicles each advanced 0.1 percent for the month, and 0.9 percent and 0.6 percent for the year ended in September, respectively.

The price index for capital goods was unchanged in September and declined 0.2 percent over the past 12 months.

Export Goods

Export prices fell 0.5 percent in September as a 0.7 percent decrease in agricultural prices and a 0.5 percent drop in the price index for nonagricultural goods each factored into the decline. The September drop in export prices was the first in 10 months and followed increases of 0.4 percent the previous two months. The decline in agricultural prices followed increases in each of the four previous months as lower prices for soybeans, vegetables, and cotton all contributed to the decrease. Despite the drop, agricultural prices increased 4.4 percent for the year ended in September. Nonagricultural prices also rose over the past 12 months, advancing 3.7 percent for the period.

The September decrease in nonagricultural prices was led by a 1.8 percent decline in the price index for nonagricultural industrial supplies and materials. Nonagricultural industrial supplies and materials prices were driven by a sharp decline in fuel prices, with lower chemicals prices also contributing to the decrease. In contrast, metal prices continued to rise. Prices for nonagricultural supplies and materials rose 9.5 percent over the past year.

Prices for the major finished goods areas were either up or unchanged in September. The price indexes for consumer goods and automotive vehicles each rose 0.1 percent in September, and increased 2.1 percent and 1.4 percent for the September 2005-2006 period, respectively. Capital goods prices were unchanged in September, although excluding computer prices, prices for capital goods advanced 0.1 percent. The price index for overall capital goods rose 0.7 percent for the year ended in September.

Imports by Locality of Origin

The price indexes for imports from Canada and from Mexico decreased in September, declining 2.0 percent and 2.5 percent, respectively. In each case, a downturn in fuel prices drove the decrease. Despite the September declines, prices for imports from Canada advanced 1.9 percent over the past year, while prices for imports from Mexico rose 6.2 percent.

Prices for imports from the European Union edged down 0.1 percent in September, also led by lower fuel prices. The price index for imports from the European Union increased 4.1 percent over the past year.

Prices for imports from China and from Japan also fell in September. The 0.2 percent decline in the prices for imports from China followed increases in the previous two months. The price index for imports from Japan fell 0.1 percent for the third consecutive month. For the year ended in September, prices for imports from China declined 1.0 percent while prices for imports from Japan fell 1.5 percent.

Import and Export Services

Both import and export air passenger fares declined in September, led by seasonal drops in European and Asian fares. Import air passenger fares decreased 5.4 percent, while export air passenger fares fell 7.6 percent. Despite the decreases, the price indexes for import and export air passenger fares rose for the year ended in September, up 5.6 percent and 2.1 percent, respectively.

Import air freight prices increased 0.5 percent in September after declining in each of the previous two months. A 1.4 percent advance in European air freight prices led the increase. The price index for export air freight prices increased 1.4 percent in September and 6.6 percent over the past year.