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Economy in Brief

Import Prices Higher With Petroleum, Non Oil Prices Easier
by Tom Moeller February 17, 2005

Import prices rose 0.9% last month due to a surprising 4.6% spurt in petroleum prices. Consensus expectations had been for a 0.6% rise. Nonpetroleum prices, however, rose an easier 0.2% following a downwardly revised gain of 0.4% in December.

During the last ten years there has been a negative 55% correlation between the foreign exchange value of the dollar against major currencies and the y/y change in nonpetroleum import prices. There has been a negative 39% correlation between the broad trade weighted dollar index and prices.

Import pricing strength in January was pronounced for consumer goods less autos, up 0.4% (0.8% y/y). Capital goods prices rose a moderate 0.2% (-0.8% y/y) but that gain was held back by a 1.0% (-6.9% y/y) decline in computer prices. Excluding computers capital goods prices rose 0.8% (2.3% y/y), lifted by a 1.7% rise in prices for civilian aircraft. Motor vehicle and parts prices fell 0.1% (+1.6% y/y) and food & beverage prices fell 0.2% (+6.9% y/y).

Petroleum prices jumped 4.6%. The price of Brent crude oil rose to $43.55 in January and is up roughly another dollar this month.

Export prices rose 0.7% due to a 0.7% surge (5.1% y/y) in nonagricultural export prices.

Import/Export Prices (NSA) Jan Dec Y/Y 2004 2003 2002
Import - All Commodities 0.9% -1.4% 6.0% 5.6% 2.9% -2.5%
  Petroleum 4.6% -11.5% 26.9% 30.4% 21.0% 3.0%
  Non-petroleum 0.2% 0.4% 3.0% 2.6% 1.1% -2.4%
Export - All Commodities 0.7% 0.2% 4.0% 3.9% 1.6% -1.0%
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