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Economy in Brief

U.S. Total Import Prices Eased, Nonoil Strongest Since 1995
by Tom Moeller March 13, 2008

Overall import prices during February gained only 0.2% after a very firm, little revised 1.6% January increase. Expectations had been for a stronger 0.8% rise last month.

Petroleum prices fell an unexpected 0.5% after a 4.8% surge in January. That decline helped industrial materials prices to rise just 0.2%, but crude petroleum prices look to be up 8.0% this month versus February.

Less petroleum import prices were strong again last month and rose 0.6%. The lower foreign exchange value of the dollar has pushed the y/y increase in these prices to 4.5%, the strongest rate of increase since 1995.

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 reduced 47% against a broader basket of currencies.

Prices for industrial supplies & materials excluding petroleum surged again, last month by 2.5% (12.5% y/y) led by another surge in chemical prices (23.9% y/y). Finished metal prices also have been strong (12.4% y/y) as have been paper prices (2.3% y/y). They are recovering after deflation last year. The detailed import price series can be found in the Haver USINT database.

Capital goods import prices rose just 0.1% (0.9% y/y) but that y/y gain follows a 0.4% increase last year and a 0.7% decline in 2006. Prices of computers, peripheral and semiconductors fell 0.5% last month (-5.0% y/y). Less the high tech sector, capital goods prices rose 0.3% (3.4% y/y) and here again the y/y increase is well elevated from a 2.7% rise last year and a 1.4% 2006 gain.

Finally, prices for nonauto consumer goods imports rose 0.3% in February (2.1% y/y) and the y/y rise in prices is now up from a 1.6% 2007 increase and a 0.4% uptick during 2006. Apparel prices are well up (2.0% y/y), double the rise of last year.

Total export prices have been quite strong with the 6.8% y/y gain led by a 30.8% jump in agricultural prices. That is followed by an accelerated 4.6% y/y gain in nonagricultural export prices which rose 3.6% last year.

Today's remarks by Treasury Secretary Henry M. Paulson, Jr. can be found here.

Import/Export Prices (NSA) February January Y/Y 2007 2006 2005
Import - All Commodities 0.2% 1.6% 13.6% 4.2% 4.9% 7.5%
  Petroleum -0.5% 4.8% 60.9% 11.6% 20.6% 37.6%
  Non-petroleum 0.6% 0.7% 4.5% 2.7% 1.7% 2.7%
Export- All Commodities 0.9% 1.2% 6.8% 4.9% 3.6% 3.2%
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