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Economy in Brief

Import Prices Firmer Than Expected in November
by Tom Moeller December 9, 2004

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.

Import/Export Prices (NSA) Nov Oct Y/Y 2003 2002 2001
Import - All Commodities 0.2% 1.6% 9.5% 2.9% -2.5% -3.5%
  Petroleum -2.6% 11.6% 60.4% 21.0% 3.0% -17.2%
  Non-petroleum 0.7% -0.1% 3.4% 1.1% -2.4% -1.5%
Export - All Commodities 0.3% 0.7% 4.3% 1.6% -1.0% -0.8%
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