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Economy in Brief

U.S. Total Import Prices Surged, Ex. Oil They Jumped As Well
by Tom Moeller May 13, 2008

Overall import prices surged last month. The 1.8% gain was right in line with expectations and it followed an even stronger 2.9% surge during March. Together the increases were the strongest on record.

Petroleum prices jumped 4.4% after the 9.2% surge during March. Imported crude petroleum prices already are up another 10% this month versus April.

Less petroleum, import prices increased 1.1%, the same as during March. These increases were the largest on record, pushed higher by the lower foreign exchange value of the dollar.

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.

Excluding petroleum, prices for industrial supplies & materials surged another 3.3% (17.0% y/y) which was the same as the spike during March. These prices are up 11.7% year to date due to strength in finished metal, chemicals and agricultural prices. The detailed import price series can be found in the Haver USINT database.

Capital goods import prices rose 0.8% (2.1% y/y) last month but less the lower prices of computers, capital goods prices rose 1.1% (4.4% y/y), the fastest rate of annual gain since 1995. Prices of computers, peripherals and accessories fell 0.3% (-3.8% y/y).

Finally, prices for nonauto consumer goods imports rose 0.2% (2.8% y/y) after two months of 0.4% increase. The y/y increase was the quickest since 1992. Price gains were notably strong for apparel and household goods.

The increase in total export prices eased to just 0.3% after three consecutive months of increase above 1.0%. Agricultural prices fell 2.2% (+32.3% y/y) but nonagricultural export prices rose 0.6% (5.6% y/y).

Globalization and Monetary Policy is today's speech by Cleveland Fed Bank President Sandra Pianalto and it can be found here.

Import/Export Prices (NSA) April March Y/Y 2007 2006 2005
Import - All Commodities 1.8% 2.9% 15.4% 4.2% 4.9% 7.5%
  Petroleum 4.4% 9.2% 57.2% 11.6% 20.6% 37.6%
  Non-petroleum 1.1% 1.1% 6.2% 2.7% 1.7% 2.7%
Export- All Commodities 0.3% 1.5% 7.7% 4.9% 3.6% 3.2%
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