May 2008 U.S. Import and Export Price Indexes

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- MAY 2008 -

The U.S. Import Price Index rose 2.3 percent in May, the Bureau of Labor Statistics of the U.S. Department of Labor reported today, following advances of 2.4 percent in April and 3.0 percent in March. Rising prices for both petroleum and nonpetroleum imports factored into the increases. The price index for overall exports advanced 0.3 percent in May after rising 0.5 percent the previous month.

Import Goods

May import prices rose 2.3 percent and were up 7.9 percent between February and May, the largest three-month jump for the index since October 1990. Import prices advanced 17.8 percent over the past year, which was the largest year-over-year rise since the index was first published in September 1982. Higher petroleum prices continued to be a major contributor to the advance in overall import prices, increasing 7.8 percent in May after rising 5.9 percent and 9.8 percent, respectively, in the prior two months. Petroleum prices rose 68.8 percent for the year ended in May, the largest 12-month advance since the index was up 82.5 percent between February 2002 and February 2003. Nonpetroleum prices also increased in May, although the 0.5 percent advance was modest compared to the 1.3 percent increase in April and the 1.2 percent rise in March. The index was up 6.6 percent over the past year.

A 1.8 percent advance in the price index for nonpetroleum industrial supplies and materials led the May increase in nonpetroleum prices. The May rise in nonpetroleum industrial supplies and materials prices followed a 3.4 percent advance in April and the index rose 17.0 percent over the previous 12 months. Higher prices for natural gas, steelmaking materials, and iron and steel products were the largest contributors to the May advance.

Rising prices for capital goods, consumer goods, and foods, feeds, and beverages also factored into the rise in nonpetroleum prices. Capital goods prices increased 0.3 percent in May after rising 0.9 percent the previous month. Consumer goods prices advanced 0.2 percent for the month and followed a 0.7 percent increase in April. The price index for foods, feeds, and beverages rose 1.0 percent in May, led by higher prices for meats and grains.

Prices for import automotive vehicles were unchanged in May following a 0.4 percent increase the previous month.

Export Goods

Export prices continued to trend up in May, although the 0.3 percent increase was the smallest monthly advance since September 2007. The index advanced 8.0 percent over the past year. The price indexes for nonagricultural exports and agricultural exports each contributed to the overall increase in May export prices, moving up 0.4 percent and 0.3 percent, respectively. The increase in agricultural prices followed a 2.1 percent downturn in April and was driven by higher prices for soybeans, vegetables, and meat which more than offset a 16.7 percent decline in wheat prices. Agricultural prices rose 33.3 percent over the May 2007-2008 period. Nonagricultural prices also increased over the past 12 months, rising 5.7 percent.

The May advance in nonagricultural prices was led by a rise in prices for nonagricultural industrial supplies and materials which increased 1.1 percent in May after advancing 1.5 percent in April. The increase was primarily driven by rising fuel prices, although higher prices for chemicals and some metals also contributed to the advance.

Each of the major finished goods price indexes either recorded modest increases in May or were unchanged. Prices for automotive vehicles and consumer goods prices both rose 0.1 percent in May after increasing 0.4 percent and 0.2 percent, respectively, the previous month. The price index for export capital goods was unchanged in May following a 0.4 percent advance the previous month.

Imports by Locality of Origin

Rising petroleum prices in May led to higher prices for imports from Canada, the European Union, and Mexico. Each index also recorded the largest annual increase since first being published in December 1990 for Canada and the European Union, and December 2003 for Mexico. Import prices from Canada increased 3.1 percent in May and 21.2 percent over the past year. Prices of imports from the European Union rose 0.8 percent for the month and 9.4 percent for the year ended in May. The price index for imports from Mexico advanced 1.7 percent in May and 19.5 percent over the past 12 months.

Prices of imports from China continued to trend up in May, rising 0.6 percent for the month. Import prices from China also increased for the May 2007-2008 period, advancing 4.6 percent, the largest 12-month increase for the index since first being published in December 2003.

The price index of imports from Japan recorded no change in May after rising 0.3 percent the previous month.

Import and Export Services

Led by higher Asian and Latin American-Caribbean fares, import air passenger fares increased 1.3 percent in May following a 9.1 percent rise in April. Overall import air passenger fares moved up 13.7 percent for the year ended in May. Export air passenger fares increased 1.7 percent in May, driven by rising European and Asian fares. The index had declined 1.5 percent in April and rose 4.8 percent over the past 12 months.

The price indexes for import air freight and export air freight each advanced 2.1 percent in May after increasing 4.2 percent and 2.4 percent, respectively, in April. Both rises were primarily led by higher European air freight prices. The price index of import air freight increased 15.9 percent over the past year while export air freight prices advanced 17.4 percent over the same period.