July 2007 U.S. Import and Export Price Indexes

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- JULY 2007 -

The U.S. Import Price Index increased 1.5 percent in July, the Bureau of Labor Statistics of the U.S. Department of Labor reported today, after rising 0.9 percent the previous month. Higher petroleum prices drove the July advance. Export prices also continued to trend upward in July, increasing 0.2 percent following a 0.3 percent advance in June.

Import Goods

Import prices rose 1.5 percent in July, the sixth consecutive increase for the index. Petroleum prices were also up for the sixth month in a row, increasing 7.0 percent in July after a 4.4 percent rise the previous month. Over the past 12 months, the price index for petroleum imports was up 4.1 percent, while overall import prices rose 2.8 percent. Nonpetroleum prices also advanced in July, rising 0.2 percent after rising 0.1 percent in June. For the year ended in July, prices for nonpetroleum imports increased 2.8 percent.

The rise in nonpetroleum import prices was driven primarily by price increases for finished goods. The price index for capital goods increased 0.2 percent, following advances of 0.2 percent and 0.1 percent, respectively, in June and May. The increase in capital goods prices was led by a 2.3 percent advance in the price index for transportation equipment, excluding motor vehicles. Consumer goods prices edged up 0.1 percent for the second consecutive month. Similarly, the price index for automotive vehicles increased 0.1 percent for the fourth consecutive month.

An increase in food prices also contributed to the overall increase in nonpetroleum import prices. Foods, feeds, and beverages prices continued to rise, advancing 1.6 percent in July and 9.8 percent over the past year. A 9.7 percent increase in vegetables prices led the July increase.

In contrast, the price index for nonpetroleum industrial supplies and materials edged down 0.1 percent in July, the first decrease since January. The decline was led by lower prices for natural gas.

Export Goods

Export prices advanced 0.2 percent in July following increases of 0.3 percent and 0.2 percent in June and May, respectively. Agricultural export prices led the July increase, rising 1.5 percent. The advance followed an increase of 2.7 percent in June and continued an upward trend over the past 15 months. Higher prices for wheat, soybeans, and cotton contributed to the July increase, offsetting a decline in corn prices. Prices for agricultural exports rose 17.8 percent over the past year. Nonagricultural prices were unchanged in July. For the July 2006-2007 period, nonagricultural prices rose 2.8 percent while overall export prices increased 3.9 percent.

The price index for nonagricultural industrial supplies and materials fell 0.5 percent in July, the first decline since October 2006. Lower metals prices drove the index downward, offsetting higher prices for fuel, paper, and chemicals. Despite the July downturn, nonagricultural industrial supplies and materials prices increased 6.0 percent for the year ended in July.

In contrast, prices for each of the major finished goods categories rose in July. The price index for consumer goods increased 0.4 percent, while the price indexes for capital goods and automotive vehicles advanced 0.2 percent and 0.1 percent, respectively.

Imports by Locality of Origin

The price index for imports from China rose 0.4 percent in July, the largest monthly increase since the index was first published in December 2003. The July increase was the third consecutive monthly advance. Over the past year, import prices from China increased 0.9 percent.

Higher petroleum prices in July contributed to increasing prices for imports from Mexico and Canada, which rose 1.7 percent and 0.3 percent, respectively. For the year ended in July, import prices from Mexico rose 4.7 percent and import prices from Canada advanced 3.7 percent.

In contrast, July prices for imports from Japan and the European Union decreased 0.2 percent and 0.4 percent, respectively. Over the past 12 months, import prices from Japan fell 0.7 percent, while import prices from the European Union rose 1.1 percent.

Import and Export Services

Export travel and tourism prices, which are lagged one month, fell 0.2 percent in June after increasing in four of the previous five months.

Import air passenger fares increased 3.3 percent in July, driven by similar advances of 5.8 percent and 5.6 percent, respectively, in Asian and Latin American/Caribbean fares. Export air passenger fares also increased, rising 5.0 percent in July after falling 1.5 percent in June. Over the past year, import air passenger fares rose 7.2 percent while export air passenger fares advanced 5.6 percent.

Prices for import air freight were unchanged in July, after declining 0.2 percent in June. Prices for export air freight increased 0.6 percent. For the year ended in July, import air freight prices decreased 0.8 percent while export air freight prices advanced 1.8 percent.