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Economy in Brief

U.S. Total Import Price Surge Quickest Since 1990
by Tom Moeller June 12, 2008

U.S. import prices, overall, surged another 2.3% last month and the gain was right in-line with expectations. It followed a like 2.4% April increase which was upwardly revised from 1.8%. During the last three months import prices have risen at a 35.4% annual rate which was the quickest since late 1990.

Petroleum prices jumped further by 7.8% and imported crude petroleum prices already are up another 10% this month versus May.

Less petroleum, the gain in import prices eased to 0.5% from an upwardly revised 1.3% during April. Pushed higher by the lower foreign exchange value of the dollar, the price increases during the last three months are the fastest on record.

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 oil surged another 1.8% (17.0% y/y) in May. These prices are up at a 36.5% rate so far this year 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 increased 0.3% after an upwardly revised 0.9% April rise. So far this year prices have risen at a 2.9% rate after a 0.4% increase last year, but less the lower prices of computers, capital goods prices have risen at a 7.1% in 2008 through May. That's after a 2.7% rise during all of 2007. Prices of computers, peripherals and accessories have fallen at a 6.4% rate this year after the 5.1% 2007 decline.

Finally, prices for nonauto consumer goods imports have risen at a 5.5% in 2008 after the 1.6% increase last year. This year's gain in prices is the quickest since 1992 and has been notable for durables (5.9%), apparel (2.4%) and other nondurable products (9.6%).

Total export prices increased 0.3% as agricultural prices rose 0.3% (33.3% y/y) after a 2.1% April drop. Nonagricultural export prices rose 0.4% (5.7% y/y).

Import/Export Prices (NSA) May April Y/Y 2007 2006 2005
Import - All Commodities 2.3% 2.4% 17.8% 4.2% 4.9% 7.5%
  Petroleum 7.8% 5.9% 68.8% 11.6% 20.6% 37.6%
  Non-petroleum 0.5% 1.3% 6.6% 2.7% 1.7% 2.7%
Export- All Commodities 0.3% 0.5% 8.0% 4.9% 3.6% 3.2%
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