July 2008 U.S. Import and Export Price Indexes

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- JULY 2008 -

The U.S. Import Price Index increased 1.7 percent in July, the Bureau of Labor Statistics of the U.S. Department of Labor reported today, after a 2.9 percent rise in June. Both petroleum and nonpetroleum prices contributed to the advance, increasing 4.0 percent and 0.9 percent, respectively. Export prices rose 1.4 percent in July following a 1.0 percent advance the previous month.

Import Goods

Import prices increased 1.7 percent in July after rising between 2.8 and 3.1 percent in each of the previous four months. Prices for overall imports jumped 21.6 percent for the year ended in July, the largest 12-month increase for the index since first publication in September 1982. Petroleum prices continued to trend upward, although the 4.0 percent advance in July was comparatively smaller than the average monthly increases recorded between February and June when petroleum prices rose 42.1 percent overall. The price index for petroleum advanced 79.2 percent over the past year. Nonpetroleum prices also contributed to the July increase in overall import prices, rising 0.9 percent for the second consecutive month. Prices for nonpetroleum imports increased 8.0 percent over the past 12 months.

The increase in nonpetroleum prices was led by a 2.2 percent advance in the price index for nonpetroleum industrial supplies and materials. Continued price hikes for natural gas, chemicals, and metals factored into the increase. Import foods, feeds, and beverages prices rose 1.5 percent in July after a 1.7 percent increase in June. The July advance was driven by higher prices for meat and vegetables.

Prices for each of the major finished goods categories also were higher in July. The price indexes for consumer goods and capital goods each rose 0.3 percent. Higher furniture prices contributed to the increase in consumer goods prices while the rise in capital goods prices was led by a 0.8 percent advance in capital goods prices excluding computers which more than offset a 0.8 percent drop in computer prices. Prices for automotive vehicles ticked up 0.1 percent in July.

Export Goods

Export prices rose 1.4 percent in July following a 1.0 percent increase in June. Prices for exports advanced 10.2 percent over the July 2007-2008 period, the largest year-over-year gain since the all exports index was first published in September 1983. Higher prices for agricultural prices and nonagricultural prices each contributed to the annual increase in overall export prices as both indexes recorded the largest 12-month advance since these series were first published in March 1985.

Agricultural prices rose 6.7 percent in July and 39.9 percent over the past year, and both changes were driven by sharp increases in corn and soybeans prices. The July advance was the largest one-month rise since the agricultural exports price index was first published monthly in December 1988.

Prices for nonagricultural exports advanced 0.8 percent for the month and 7.5 percent for the year ended in July. The July increase in nonagricultural prices was driven by a 2.6 percent advance in the price index for nonagricultural industrial supplies and materials. Higher prices for fuels, chemicals, and metals all contributed to the increase.

Prices for consumer goods and automotive vehicles also advanced in July, rising 0.4 percent and 0.1 percent, respectively, after recording little movement the past two months. In contrast, capital goods prices declined 0.2 percent in July after increases in each of the previous three months. The decrease was led by falling computer prices which had risen in June. Despite the July drop, prices for capital goods rose 2.0 percent over the past 12 months.

Imports by Locality of Origin

Import prices from China rose 0.9 percent in July following a 0.6 percent increase in June. The July advance matched the largest one-month gain for the index. Prices for imports from China increased 5.3 percent for the July 2007-2008 period, which was also the largest annual rise since the index was first published in December 2003.

The price index for imports from Japan advanced 0.5 percent in July, the largest monthly increase for the index since a similar rise of 0.5 percent in December 2003. Import price from Japan rose 1.8 percent over the past year, which was the largest year-over-year gain since the index was up 2.0 percent for the August 1999-2000 period.

Prices for imports from Canada, Mexico, and the European Union were also up in July, rising 1.7 percent, 1.4 percent, and 0.7 percent, respectively. Rising fuel prices were the primary contributor to the rise in each index.

Import and Export Services

The index for import air passenger fares advanced 4.1 percent in July after an 18.3 percent jump the previous month. Import air passenger fares were up 19.5 percent for the year ended in July. Export air passenger fares increased 5.4 percent in July and rose 16.7 percent over the past 12 months.

Import air freight prices rose 0.8 percent in July and increased 18.5 percent over the past year. Both advances were led by a sharp rise in European air freight prices, which increased 2.6 percent in July and 33.3 percent for the July 2007-2008 period. Export air freight prices advanced 1.6 percent in July and rose 21.6 percent over the past 12 months. European air freight prices were the largest factor for those increases as well, rising 2.4 percent for the month and 37.4 percent for the year ended in July.