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Economy in Brief

U.S. Import Prices Tick Higher As Non-Oil Prices Firm
by Tom Moeller October 14, 2009

Weakness in the U.S. dollar is pushing up non-oil import prices. Following the strength in oil prices earlier this year, now non-oil prices have firmed. U.S. import prices last month ticked up the expected 0.1% after jumps between 1.0% and 3.0% during three of the prior four months.

The latest report showed that non-oil import prices rose 0.4%, which was the strongest monthly increase since July of last year. On a three-month basis, these prices have risen at a 1.9% annual rate after declining at a 13.6% rate as of last December. (During the last ten years, there has been a negative 81% 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.)

Import prices break down as follows: Food prices added 0.4% to a 1.3% August increase (-5.0% y/y). Capital goods prices broke from weakness with a 0.1% uptick which raised the three-month change to 0.4% following a 3.4% rate of decline in June. Prices for nonauto consumer goods also rose 0.1% (-1.0% y/y) and brought the three-month change to -1.1% from its weakest reading of -2.6% in January. Durable consumer goods prices were unchanged (-1.4% y/y) after two months of slight decline. Household goods rose slightly (-1.6% y/y) and furniture prices jumped 0.9% (-1.0% y/y). Apparel prices were unchanged for the second month (-1.1% y/y) but the three-month change improved to -0.4% from -4.3% six months ago.

The recent gain in petroleum prices took a breather last month and fell 1.1% after sharp increases during six of the prior seven months. This month, however, crude oil prices have found renewed strength and were up to $74.15 per barrel yesterday from a September average of $69.46.

Total export prices reversed some of their earlier strengthening with a fall of 0.3%. The drop was led by a 2.8% (-16.6% y/y) decline in agricultural prices. Nonagricultural export prices were unchanged and down 4.4% y/y.

The import and export price series can be found in Haver's USECON database. Detailed figures are available in the USINT database.

Import/Export Prices (NSA, %) September August July Y/Y 2008 2007 2006
Import - All Commodities 0.1 1.6 -0.7 -12.0 11.5 4.2 4.9
  Petroleum -1.1 7.7 -2.5 -32.5 37.7 11.6 20.6
  Nonpetroleum 0.4 0.3 -0.2 -5.4 5.3 2.7 1.7
Export - All Commodities -0.3 0.7 -0.3 -5.6 6.0 4.9 3.6
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