June 2010 U.S. Import and Export Price Indexes

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U.S. import prices declined for the second consecutive month in June, the U.S. Bureau of Labor Statistics reported today, decreasing 1.3 percent. The drop was driven by declining fuel prices, although a downturn in nonfuel prices also contributed to the overall decrease. Export prices also fell in June, edging down 0.2 percent following three consecutive monthly increases.

Imports

All Imports: Prices of U.S. imports fell 1.3 percent in June after a 0.5 percent drop the previous month. The decrease was the largest monthly decline since a 1.3 percent decline in January 2009, which was also the last time the index fell in consecutive months. Despite the recent declines, import prices advanced 4.5 percent for the year ended in June, down on a 12-month basis from an 8.7 percent increase for the May 2009-2010 period.

Fuel Imports: Fuel prices also declined for the second consecutive month, falling 4.0 percent in June after a similar 4.1 percent decrease in May. The June decline was led by a 4.4 percent drop in petroleum prices which followed a 4.2 percent fall in May and was the largest monthly decrease for that index since a 4.6 percent drop in January 2009. For the first half of 2010, petroleum prices were virtually unchanged. In contrast, natural gas prices rose 1.5 percent in June, partially offsetting the decline in petroleum prices. Despite the recent decreases, overall fuel prices increased 11.6 percent over the past year.

All Imports Excluding Fuel: The price index for import prices excluding fuel fell 0.6 percent in June, the first monthly decline since a 0.2 percent decrease in July 2009 and the largest since a 0.6 percent drop in March 2009. A 1.5 percent downturn in nonfuel industrial supplies and materials was the largest contributor to the June decline, while prices for consumer goods, foods, feeds, and beverages, and capital goods also decreased. For the 12 months ended in June, nonfuel import prices advanced 2.8 percent.

Exports

All Exports: Export prices fell 0.2 percent in June following increases of 0.6 percent, 1.1 percent, and 0.7 percent, respectively, the previous three months. Most of the decline was attributable to falling nonagricultural prices, although agricultural prices also declined. The price index for overall exports rose on a 12-month basis in June, increasing 4.3 percent.

Agricultural Exports: Prices for agricultural exports edged down 0.1 percent in June after a 1.5 percent increase in May. The decrease was led by a 4.9 percent fall in corn prices and a 7.2 percent drop in wheat prices, which more than offset higher cotton and nut prices. Agricultural prices decreased 2.8 percent for the year ended in June.

All Exports Excluding Agriculture: The price index for nonagricultural exports fell 0.2 percent in June, the first monthly decline for the index since March 2009. The June decrease was led by a 0.4 percent drop in capital goods prices and a 0.6 percent decline in consumer goods prices. Notwithstanding the June downturn, nonagricultural export prices rose 5.1 percent over the past year.

SELECTED JUNE HIGHLIGHTS

Import Prices

Nonfuel Industrial Supplies and Materials: Prices for nonfuel industrial supplies and materials fell 1.5 percent in June, the first decline for the index since a 0.3 percent drop in July 2009 and the largest one- month downturn since a 4.1 percent decrease in January 2009. The decline in nonfuel industrial supplies and materials prices was led by a 3.4 percent downturn in unfinished metals prices which increased 3.7 percent in May. Unfinished metals prices, up 38.6 percent over the past 12 months, have been the largest factor for an upward trend in nonfuel industrial supplies and materials prices over the past year.

Finished Goods: Prices for each of the major finished goods categories declined in June. Consumer goods prices fell 0.4 percent, the largest drop since a 0.5 percent decline in March 2009. Lower prices for household goods, toys, and television receivers all contributed to the decrease. Capital goods prices and prices for automotive vehicles also declined in June, falling 0.3 percent and 0.2 percent, respectively.

Foods, Feeds, and Beverages: Foods, feeds, and beverages prices also declined in June, falling 1.7 percent after a 1.3 percent rise the previous month. A 5.3 percent decrease in fruit prices and a 4.5 percent drop in vegetable prices were the primary contributors to the decline.

Imports by Locality of Origin: The price index of imports from China declined 0.3 percent in June, the largest monthly decrease since a 0.3 percent drop in January. Falling fuel prices led the declines in import prices from Canada, the European Union, and Mexico; down 1.6 percent, 0.9 percent, and 0.8 percent, respectively. In contrast, prices of imports from Japan ticked up 0.1 percent in June.

Transportation Services: Import air passenger fares increased 9.2 percent in June, led by seasonal increases in European and Asian fares, up 13.7 percent and 11.5 percent, respectively. The seasonal June increase was the largest monthly advance since a 13.0 percent increase in June 2009. The index for import air passenger fares rose 19.0 percent over the last 12 months. Import air freight prices fell 0.9 percent in June, driven by a 5.5 percent decline in European air freight prices. Despite the June drop, import air freight prices rose 22.1 percent over the past year.

Export Prices

Nonagricultural Industrial Supplies and Materials: Prices for nonagricultural supplies and materials were unchanged in June following a 1.6 percent increase in May. Decreasing metals and chemical prices were offset by a 5.1 percent increase in export fuel prices that was driven by an increase in coal prices.

Finished Goods: Finished goods prices were down overall for the second consecutive month in June. The price index for capital goods fell 0.4 percent, the largest one-month drop since a similar 0.4 percent decline in August 2005. The June decrease was led by a 1.6 percent decline in computer, peripherals, and semi- conductor prices. Consumer goods prices fell 0.6 percent in June, the first monthly decrease for the index since a 0.9 percent drop in April 2009.

Transportation Services: Export air passenger fares rose 6.7 percent in June, led by an 18.1 percent surge in European fares. The index for export air passenger fares advanced 26.2 percent for the year ended in June. Export air freight prices increased 1.8 percent in June and 8.3 percent over the past year.

Import and Export Price Index data for July 2010 are scheduled for release on Thursday, August 12, 2010 at 8:30 a.m. (EDT).