October 2006 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.

- OCTOBER 2006 -

The U.S. Import Price Index declined 2.0 percent for the second consecutive month in October, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The decrease was again led by declining petroleum prices, which fell 8.3 percent in October following a decrease of 9.7 percent in September. Export prices fell 0.4 percent in October, after declining by the same amount the previous month.

Import Goods

The 2.0 percent decreases in September and October followed increases in each of the prior five months and led import prices down 0.2 percent for the year ended in October. Once again lower petroleum prices, which felt 8.3 percent for the month, were the largest contributing factor to the drop. Despite increasing 23.8 percent from February to August, petroleum prices declined 2.9 percent over the past 12 months. The price index for nonpetroleum imports decreased 0.6 percent in October, the first monthly decline since March, but rose 0.5 percent over the past year.

The October decrease in nonpetroleum prices was led by a 2.7 percent decline in the price index for nonpetroleum industrial supplies and materials. A sharp drop in natural gas prices was the primary contributor to the decline, although a downturn in metals prices as well as lower building materials prices also factored into the decrease. Unfinished metal prices, which were up 36.8 percent over the past year, fell 1.0 percent in October.

The price indexes for automotive vehicles, consumer goods, and foods, feeds, and beverages all rose in October, increasing 0.3 percent, 0.1 percent, and 0.2 percent, respectively. The increase in automotive vehicles prices was the largest monthly gain since a similar 0.3 percent increase in October 2004, and was attributable to year-end model changeovers.

Capital goods prices edged down 0.1 percent in October because of lower prices for computers, peripherals, and semiconductors. Excluding computer prices, prices for capital goods rose 0.2 percent for the month.

Export Goods

Export prices declined 0.4 percent in October following a similar 0.4 percent drop in September, marking the first time the index has decreased in consecutive months in over three years. A 0.5 percent decrease in nonagricultural prices more than offset a 1.1 percent increase in the price index for agricultural exports. Agricultural prices resumed an upward trend after declining 0.5 percent in September. The October increase was led by higher prices for corn, wheat, and soybeans. Prices for agricultural exports increased 5.4 percent over the past 12 months. The decrease in nonagricultural prices followed a 0.3 percent decline in September, which was the first monthly drop for the index since November 2005. Despite the October decreases, the price indexes for both nonagricultural exports and overall exports increased for the October 2005-2006 period, rising 2.6 percent and 2.8 percent, respectively.

A 1.8 percent decrease in prices for nonagricultural industrial supplies and materials drove the October decline in nonagricultural prices. The drop in nonagricultural industrial supplies and materials prices, which followed a 1.2 percent decrease in September, was the largest monthly decline for the index in 11 months. A drop in fuel prices was the biggest reason for the decline, but lower metals and chemical prices were also contributing factors.

In contrast, prices for each of the major finished goods areas either rose or were unchanged in October. Capital goods prices and prices for automotive vehicles increased 0.2 percent and 0.1 percent, respectively, while the price index for consumer goods recorded no change for the month.

Imports by Locality of Origin

Import prices from Canada fell 3.4 percent in October after declining 2.3 percent the previous month. The decrease was the largest one-month drop since April 2003 and was driven by lower fuel prices. Prices of imports from Canada decreased 5.9 percent for the year ended in October. Declining fuel prices also led the price index for imports from Mexico down in October. The index, which fell 1.6 percent for the month, rose 5.6 percent over the past year.

The price indexes for imports from Japan and China also decreased in October, declining 0.3 percent and 0.1 percent, respectively. The October drop in import prices from Japan was the third decline in the past four months and the index decreased 1.7 percent for the year ended in October. The fall in prices from China followed a 0.2 percent decline in September and the index was down 1.3 percent over the past 12 months.

In contrast, prices for imports from the European Union increased 0.2 percent in October as a 0.4 percent advance in manufactured articles prices more than offset a 5.5 percent decline in prices for nonmanufactured articles. Import prices from the European Union rose 4.7 percent for the October 2005- 2006 period.

Import and Export Services

Import air passenger fares declined 4.1 percent in October, led down for the second consecutive month by lower seasonal European and Asian fares. Despite the decreases in September and October, import air passenger fares rose 5.9 percent over the past 12 months. Export air passenger fares also fell in October, declining 1.9 percent following a 7.6 percent drop in September. The index increased 3.0 percent for the year ended in October.

Both import and export air freight prices decreased in October after rising in September. Prices for import air freight edged down 0.2 percent following a 0.5 percent advance the previous month. The price index for export air freight fell 0.7 percent in October after increasing 1.4 percent the month before.