·
Import prices increased 0.2% last month versus the Consensus expectation
for no change, the gain held back by a 2.6% decline in petroleum prices.
Yesterday's price for Brent crude oil of $37.52/bbl. versus the November
average of $43.17 heralds another decline this month.
· Non-petroleum import prices, however, rose a strong 0.7% in November. Strength reflected a 2.8% (16.0% y/y) increase in prices for industrial materials excluding petroleum, driven by a 27.5% (42.5% y/y) increase in natural gas prices.
· But prices for other goods firmed as well. Capital goods prices rose 0.2% (-1.5% y/y) following several months of decline. The decline in computer prices eased to -0.1% (-6.9% y/y) and capital goods prices excluding computers rose 0.3% (+1.3% y/y). That y/y rate of increase has been roughly stable since early 2003. Non-auto consumer goods prices increased 0.1% (+0.4% y/y), the largest monthly increase since February. Motor vehicle & parts prices rose 0.2% (2.1% y/y).
· During the last fifteen years there has been a (negative) 47% correlation between the nominal broad foreign exchange value of the U.S. dollar and the y/y change in nonpetroleum import prices.
· Export prices rose 0.3% as a 0.4% rise in nonagricultural prices (5.5% y/y) offset a 0.1% decline in agricultural prices (-5.2% y/y).
· "Easing Out of the Bank of Japan's Monetary Easing Policy" from the Federal Reserve Bank of San Francisco is available here.
· "Considering the Capital Account" from the Federal Reserve Bank of St. Louis can be found here.