Import and export price indexes for October up solidly

The U.S. Import Price Index advanced 1.8 percent in October, the U.S. Department of Labor’s Bureau of Labor Statistics reported on November 12, led by a 6.9 percent rise in petroleum prices. The increase followed a 0.8 percent advance in September. Prices for U.S. exports rose 0.9 percent in October after a 0.3 percent increase the previous month.

Import Goods

The 1.8 percent rise in import prices in October was the largest monthly increase since a similar change in May 2006. The advance followed a 0.8 percent rise in September as the increase during the past two months continued the upward trend over most of 2007 after a 0.4 percent downturn in August. The 6.9 percent increase in petroleum prices was the largest contributor to the October increase, although non-petroleum prices also advanced, rising 0.5 percent. Petroleum prices continued an upward trend over the past year, rising 41.4 percent for the 12 months ended in October. The increase in non-petroleum prices in October followed a 0.2 percent decline in September. Non-petroleum prices advanced 3.2 percent over the past year while the price index for overall imports rose 9.6 percent for the same period.

A 1.5 percent increase in the price index for non-petroleum industrial supplies and materials was the largest contributor to the overall rise in non-petroleum prices in October. The advance followed declines in each of the three prior months. In October, higher prices for natural gas, chemicals and some metals more than offset decreasing prices for building materials.

The price indexes for automotive vehicles and consumer goods also rose in October. The 0.4 percent advance in automotive vehicle prices was the largest increase since a 0.7 percent jump in October 2003 and was driven by higher prices for passenger automobiles and parts. The increase in passenger automobile prices was partially due to year-end model changeovers. Prices for consumer goods ticked up 0.1 percent for the third consecutive month.

In contrast, capital goods prices edged down 0.1 percent in October, the first monthly drop for the index since April. The decline was led by a 0.9 percent decrease in computer prices. Excluding computers, prices for capital goods increased 0.2 percent.

Export Goods

The 0.9 percent increase in export prices was the largest one-month gain in the index since a 1.0 percent increase in April 1995. Higher prices for both agricultural and non-agricultural exports contributed to the advance. Agricultural prices increased 3.9 percent in October after a 4.1 percent rise the previous month and advanced 26.8 percent over the past year. The October increase was driven by a sharp rise in wheat prices, which rose 18.9 percent following a 22.0 percent increase in September. Higher prices for soybeans, vegetables and corn also contributed to the overall advance in agricultural prices. Non-agricultural prices increased 0.5 percent in October after recording a 0.1 percent decline the previous month. For the year ended in October, non-agricultural prices rose 3.9 percent while overall export prices advanced 5.6 percent.

The October increase in non-agricultural prices was led by a 1.2 percent rise in the price index for non-agricultural industrial supplies and materials. The advance followed a 0.3 percent downturn in September. Rising prices for fuel, metals, and chemicals were the main contributors to the October increase.  

Each of the major finished goods indexes also recorded advances in October. The price indexes for consumer goods and capital goods rose 0.4 percent and 0.2 percent, respectively. Automotive vehicle prices increased 0.3 percent in October, which was mostly attributable to year-end model changeovers.

Imports by Locality of Origin

Prices for imports from China rose for the sixth consecutive month in October, increasing 0.3 percent. The index had risen 0.1 percent in September following 0.4 percent increases in July and August. The index rose 2.2 percent over the past 12 months after declining 1.4 percent for the October 2005-2006 period.

Import prices from Canada and from the European Union advanced 1.8 percent and 0.6 percent, respectively, in October. Higher fuel prices and a decline in the value of the dollar contributed to the increases. For the year ended in October, prices for imports from Canada rose 11.4 percent while import prices from the European Union were up 2.4 percent.

The price indexes for imports from Mexico and from Japan also increased in October, rising 2.5 percent and 0.1 percent, respectively. Higher petroleum prices led the advance in prices for imports from Mexico, which rose 12.6 percent over the past year. In contrast, import prices from Japan declined 0.2 percent over the same period.