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Economy in Brief

Import Prices Fell Again
by Tom Moeller April 13, 2006

During March, total import prices fell a surprising 0.4% after an unrevised 0.5% drop the prior month. Consensus expectations had been for a 0.2% increase.

Unexpected was a 0.7% decline in petroleum prices. Crude oil prices dropped 0.5% (+20.6% y/y) but so far in April the price of Brent Crude is up sharply m/m and yesterday stood at $69.04 versus $62.12 per bbl. during March.

Nonpetroleum import prices fell 0.3% following a revised 0.6% February decline. Industrial materials prices less petroleum fell 1.3% (+7.3% y/y) owing to a 13.0% decline in natural gas prices (+19.1% y/y).

Prices for nonauto consumer goods fell 0.2% (-0.3% y/y) and capital goods prices fell 0.1% (-1.5% y/y). Excluding a 0.3% decline in computer prices, capital goods prices were unchanged (-6.5% 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 rose 0.2%.

Import/Export Prices (NSA) Mar Feb Y/Y 2005 2004 2003
Import - All Commodities -0.4% -0.5% 4.5% 7.5% 5.6% 2.9%
  Petroleum -0.7% -0.2% 22.6% 37.6% 30.5% 21.0%
  Non-petroleum -0.3% -0.6% 1.1% 2.7% 2.6% 1.1%
Export - All Commodities 0.2% 0.1% 2.2% 3.2% 3.9% 1.6%
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