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Economy in Brief

U.S. Import Prices Down: Oil & Other Prices Off
by Tom Moeller November 9, 2006

In October, total import prices repeated the prior month's 2.0% decline and doubled Consensus expectations for a 1.0% drop.

Prices of petroleum imports plunged another 8.3% after the 9.7% September drop but in November the price of Brent crude oil is up from the $57.70 per bbl. averaged in October.

Less petroleum import prices fell 0.6%, the largest monthly decline since February. 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.

Capital goods prices slipped 0.1% (-0.1% y/y) but excluding computers, capital good prices rose 0.2% (2.0% y/y). Prices for nonauto consumer goods rose 0.1% (1.0% y/y) for the third month while prices for nonoil industrial supplies & materials fell 2.7% (-0.7% y/y) due to lower selected building materials prices (-6.1% y/y).

Have U.S. Import Prices Become Less Responsive to Changes in the Dollar? from the Federal Reserve Bank of New York can be found here.

Export prices fell 0.4% for the second month as nonagricultural commodities prices dropped 0.5% (+2.6% y/y) but agricultural export prices rose 1.1% (5.4% y/y).

Import/Export Prices (NSA) October September Y/Y 2005 2004 2003
Import - All Commodities -2.0% -2.0% -0.2% 7.5% 5.6% 2.9%
  Petroleum -8.3% -9.7% -2.9% 37.6% 30.5% 21.0%
  Non-petroleum -0.6% 0.2% 0.5% 2.7% 2.6% 1.1%
Export- All Commodities -0.4% -0.4% 2.8% 3.2% 3.9% 1.6%
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