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Economy in Brief

U.S. Total Import Prices Jumped Again
by Tom Moeller August 13, 2008

U.S. import prices overall jumped 1.7% last month after gains between 2.0% and 3.0% during the prior four months. The latest rise nearly doubled expectations for a 1.0% increase. During the last three months import prices have risen at a 34.3% annual rate which again was near the quickest since late-1990.

The rise continued to be led by the strength in petroleum prices which jumped 4.0% and the three-month rate of increase amounted to 137%. This month, however, imported crude petroleum prices already are down 14% from July.

Less petroleum, import prices rose the same 0.9% as they did during June. The 9.9% rate of price increase during the last three months was down somewhat from the recent peak rate of gain of 13.0%.

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 jumped again in July. The 2.2% surge and the three-month rate of increase of 34.9% (AR) reflected strength in building materials, unfinished metals, chemicals and agricultural prices. These detailed import price series can be found in the Haver USINT database.

Capital goods import prices rose 0.3% after a downwardly revised 0.1% dip in June. The three-month rate of gain of 2.2% was up from last year's low, but down from this spring's highs. Less the lower prices of computers, capital goods prices rose 0.8% and at a 5.6% rate during the last three months. They rose 2.7% last year. Prices of computers, peripherals & accessories fell 0.8% last month and they have been falling at a 6.7% recently, after the 5.1% 2007 decline.

Finally, prices for nonauto consumer goods imports rose 0.3% last month. Here again, the 2.3% rate of increase during the last three months is down from the peak rates of gain earlier this year. The diminished rate of increase for durables of 2.8% is notable.

Total export prices surged again, last month by 1.4% as agricultural prices jumped another 6.7% (39.9% y/y). Nonagricultural export prices rose 0.8% (7.5% y/y), about the same as they did in June.

Import/Export Prices (NSA) July June Y/Y 2007 2006 2005
Import - All Commodities 1.7% 2.9% 21.6% 4.2% 4.9% 7.5%
  Petroleum 4.0% 8.9% 79.2% 11.6% 20.6% 37.6%
  Non-petroleum 0.9% 0.9% 8.0% 2.7% 1.7% 2.7%
Export- All Commodities 1.4% 1.0% 10.2% 4.9% 3.6% 3.2%
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