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Economy in Brief

U.S. Import Prices Rise, Both Oil & Nonoil
by Tom Moeller November 13, 2009

The U.S. economy is strengthening, so suggests price pressures in the foreign trade accounts. Overall import prices rose 0.7%, though the gain fell short of Consensus expectations for a 1.0% increase. The rise was led by a 0.9% increase in petroleum prices which reversed a like decline in September and promises to be followed by another strong gain this month. The report indicated that non-oil import prices rose 0.7%, which was the strongest monthly increase since June of last year. Moreover, on a three-month basis, these prices have risen at a 5.7% 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: Chemical import prices were quite strong and posted a 2.9% increase but they still were down 16.1% from last year. Iron & steel prices also were strong, up 2.4% m/m, but down by one-third from a year ago. Food prices increased 0.1% and at an 8.0% rate during the last three months. Capital goods prices similarly posted a modest gain after five months of no change. Prices for nonauto consumer goods rose 0.3% lifting the three-month gain to 1.2% versus its weakest reading of -2.6% in January. Durable consumer goods prices rose 0.4% (-0.9% y/y) but prices of household goods slipped (-1.9% y/y) and furniture prices fell as well (-1.2% y/y). Apparel prices were unchanged for the third month (-0.5% y/y). Petroleum prices reversed their prior month's decline with a 0.9% increase during October. This month crude oil prices have found further strength with a rise to $76.94 yesterday from the October average of $75.82 per barrel.

Total export prices resumed increasing modestly. The 0.3% rise was led by a 0.3% gain in nonagricultural export prices, down 2.7% y/y. Agricultural export prices actually fell 1.0% (-10.0% 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, %) October September August Y/Y 2008 2007 2006
Import - All Commodities 0.7 0.2 1.6 -5.7 11.5 4.2 4.9
  Petroleum 0.9 -0.9 7.7 -12.2 37.7 11.6 20.6
  Nonpetroleum 0.7 0.4 0.3 -3.8 5.3 2.7 1.7
Export - All Commodities 0.3 -0.2 0.6 -3.4 6.0 4.9 3.6
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