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Economy in Brief

Import Prices Back Up
by Tom Moeller February 16, 2006

The import prices jumped 1.3% last month, the first m/m increase since October. Consensus expectations for a 1.0% increase.

Higher petroleum prices led the January strength in import prices with a 6.4% jump. Crude oil prices rose 8.0% (48.2% y/y) m/m but in February have reversed course. Yesterday's price for Brent Crude of $57.61 compared to a January average of $63.15 per bbl. and a December average of $57.03.

Nonpetroleum import prices rose 0.2% following and upwardly revised 0.1% December gain. The increase reflected a 1.2% (6.9% y/y) jump in foods, feeds & beverages. Prices for nonauto consumer goods also rose 0.2% (0.1% y/y) and capital goods prices fell 0.1% (-1.6% y/y). Excluding a 1.0% decline in computer prices (-6.6% y/y), capital goods prices rose 0.3% (0.8% y/y).

During the last ten years there has been a 66% (negative) correlation between the nominal trade-weighted exchange value of the US dollar vs. major currencies and the y/y change in non oil import prices. The correlation is a lower 47% against a broader basket of currencies and a lower 57% against the real value of the dollar.

Export prices jumped 0.7% led by a 1.7% (8.2% y/y) surge in industrial materials prices.

The Dollar U-Turn from the Federal Reserve Bank of St. Louis can be found here.

Import/Export Prices (NSA) Jan Dec Y/Y 2005 2004 2003
Import - All Commodities 1.3% -0.1% 8.8% 7.5% 5.6% 2.9%
  Petroleum 6.4% -0.4% 49.3% 37.6% 30.5% 21.0%
  Non-petroleum 0.2% 0.1% 2.4% 2.7% 2.6% 1.1%
Export - All Commodities 0.7% 0.1% 2.7% 3.2% 3.9% 1.6%
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