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Economy in Brief

Import Prices Up Just 0.1%
by Tom Moeller July 14, 2006

Total import prices rose just 0.1% last month after a 1.7% surge during May and about matched Consensus expectations for a 0.2% advance.

Lower petroleum prices held back the increase with a 1.4% decline. That likely will not be repeated in July given that Brent crude oil prices this month have ranged between $72 and $76 per barrel versus a June average of $68.56.

Import prices less petroleum rose 0.4% after an upwardly revised 0.7% May increase. The rise was led by a 1.1% (11.2% y/y) increase in nonoil industrial supplies such as a 9.3% (66.4% y/y) spike in nonferrous metals prices.

Capital goods prices rose 0.3% (-1.1% y/y) but excluding computers, capital goods prices rose 0.5% (1.2% y/y). Prices for nonauto consumer goods inched up 0.1% for the second consecutive month (-0.1% 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 a firm 0.8% led by a 1.8% gain in industrial supplies (13.3% y/y) prices.

Import/Export Prices (NSA) June May Y/Y 2005 2004 2003
Import - All Commodities 0.1% 1.7% 7.2% 7.5% 5.6% 2.9%
  Petroleum -1.4% 6.1% 32.6% 37.6% 30.5% 21.0%
  Non-petroleum 0.4% 0.7% 2.2% 2.7% 2.6% 1.1%
Export - All Commodities 0.8% 0.6% 4.2% 3.2% 3.9% 1.6%
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