July 2010 U.S. Import and Export Price Indexes

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U.S. import prices increased 0.2 percent in July, the U.S. Bureau of Labor Statistics reported today, following declines in each of the two previous months. The advance was led by higher fuel prices, which more than offset a second consecutive drop in nonfuel prices. In contrast, export prices decreased in July, falling 0.2 percent after falling 0.7 percent in June.

Imports

All Imports: Import prices ticked up 0.2 percent in July following declines of 1.3 percent and 0.8 percent, respectively, in the previous two months. Despite the July increase, the index fell 2.0 percent over the past quarter, the largest three-month decline since the quarter ended in February 2009. The price index for overall imports rose 4.9 percent for the year ended in July.

Fuel Imports: The increase in import prices was driven by a 2.1 percent advance in fuel prices. Import fuel prices had declined 4.9 percent and 5.1 percent, respectively, in June and May prior to the upturn in July. Most of the increase in fuel prices resulted from a 2.0 percent advance in petroleum prices. A 5.3 percent rise in natural gas prices also contributed to the increase. Fuel prices rose 14.8 percent over the past year, while both the price indexes for petroleum and natural gas also increased over the same period, rising 14.4 percent and 29.1 percent, respectively.

All Imports Excluding Fuel: In contrast, nonfuel prices fell 0.3 percent in July after a 0.5 percent decline in June. Those were the first monthly decreases since a 0.2 percent drop in July 2009 and the largest since a 0.6 percent decline in March 2009. The July decline was driven by a 1.2 percent decrease in the price index for nonfuel industrial supplies and materials while foods, feeds, and beverages prices advanced and the major finished goods categories were mixed. Despite the recent declines, nonfuel import prices advanced 2.8 percent over the past 12 months.

Exports

All Exports: Export prices fell for the second month in a row in July, declining 0.2 percent following a 0.7 percent decrease in June. The June and July drops represented the first time export prices have fallen in consecutive months since February and March 2009. Approximately 91 percent of the overall decrease was attributable to falling nonagricultural prices. Despite the recent declines, overall export prices rose 3.9 percent for the July 2009-2010 period.

Agricultural Exports: The price index for agricultural exports also fell in July, edging down 0.1 percent after recording no change the previous month. Agricultural prices rose 2.4 percent over the past year, led by higher prices for cotton and meat, which increased 43.3 percent and 13.1 percent, respectively.

All Exports Excluding Agriculture: Nonagricultural export prices fell 0.2 percent in July following a 0.8 percent decline in June. Prices for nonagricultural exports decreased 0.6 percent over the past quarter, the largest three-month decline since a 1.8 percent drop for the quarter ended February 2009. Falling nonagricultural industrial supplies and materials prices, capital goods prices, and prices for automotive vehicles all contributed to the decrease in July. Notwithstanding the declines over the past two months, the price index for nonagricultural exports rose 4.1 percent for the year ended in July.

SELECTED JULY HIGHLIGHTS

Import Prices

Nonfuel Industrial Supplies and Materials: Nonfuel industrial supplies and materials prices decreased 1.2 percent after a 1.5 percent drop the previous month. Those declines countered an upward trend over the past year. Lower prices for unfinished metals and building materials, down 2.5 percent and 5.2 percent, respectively, each contributed to the July decline. Despite the declines in June and July, the price index for nonfuel industrial supplies and materials rose 14.5 percent over the past year.

Finished Goods: Finished goods prices were mixed in July with the price indexes for consumer goods and capital goods declining 0.2 percent and 0.1 percent, respectively, and automotive vehicles prices rising 0.4 percent. The drop in consumer goods prices was led by a 4.1 percent decrease in prices for home entertainment equipment while lower computers, peripherals, and semiconductors prices drove the decrease in capital goods prices.

Foods, Feeds, and Beverages: Prices for foods, feeds, and beverages rose 0.4 percent in July after a 1.7 percent decline the previous month. Higher prices for coffee, bakery and confectionery products, and fish and shellfish were the main contributors to the advance.

Imports by Locality of Origin: Import prices from China ticked up 0.1 percent in July. In contrast, the price indexes for imports from Mexico, the European Union, and Canada all decreased in July, falling 0.7 percent, 0.2 percent, and 0.1 percent, respectively. Prices for imports from Japan were unchanged in July following a 0.2 percent advance the previous month.

Transportation Services: Import air passenger fares fell 1.3 percent in July, led by a 3.9 percent decline in European fares. The downturn in overall import air passenger fares followed a 9.2 percent increase the previous month. Over the past year, import air passenger fares rose 21.3 percent. The price index for import air freight also fell in July, decreasing 1.1 percent after a 0.9 percent decline in June.

Export Prices

Nonagricultural Industrial Supplies and Materials: The price index for nonagricultural industrial supplies and materials fell 0.4 percent in July following a 1.7 percent drop in June. The July decline was led by a 1.6 percent drop in fuel prices, although lower prices for chemicals and steelmaking materials also contributed to the overall decrease.

Finished Goods: Overall, finished goods prices recorded little movement in July as the prices indexes for capital goods and automotive vehicles each ticked down 0.1 percent while consumer goods prices rose 0.2 percent. The drop in capital goods prices was driven by a 0.8 percent decline in prices for computers, peripherals, and semiconductors.

Transportation Services: Export air passenger fares rose 4.8 percent in July as higher prices for Asian fares, European fares, and Latin American and Caribbean fares air contributed to the rise. In contrast, export air freight prices decreased 1.4 percent, led by a 1.9 percent drop in the price index for European air freight.

Import and Export Price Index data for August 2010 are scheduled for release on Wednesday, September 15, 2010 at 8:30 a.m. (EDT).