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Economy in Brief

U.S. Import Prices Jump As Oil Prices Surge
by Tom Moeller December 11, 2009

Strength in oil prices was the culprit in the 1.7% jump in overall import prices last month. It exceeded Consensus expectations for a 1.2% increase. 

Petroleum prices climbed 6.2% to their highest level since October of last year and have more-than-doubled since the January trough. This month, Brent crude oil prices have moved lower to roughly $71 per barrel from $77 last month. In addition, the latest report from the U.S. Bureau of Labor Statistics indicated that non-oil import prices rose 0.7% after the strong 0.6% October gain. The lower value of the dollar has now helped lift these prices at a 6.5% annual rate during the last three months following a 6.5% y/y decline as of August. (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 have been strong during the last three months, rising at a 26.5% annual rate. Iron & steel prices also have been strong rising at a 42.6% rate since August. Food prices increased at a 5.2% rate during the last three months while capital goods prices posted a modest 1.3% increase (AR) after having been little-changed from March through August. Prices for nonauto consumer goods remained weak, down 0.1% last month and up at a 0.4% during the last three. Durable consumer goods prices rose rose at a 1.4% annual rate over the last three months, though that is improved from a 6.5% rate of decline early this year. Furniture prices continued down to the lowest level since April of last year (-1.5% y/y). Apparel prices have been flat since July (-0.5% y/y).

Total export prices rose a firm 0.8% and at a 3.4% annual rate during the last three months. The gain was led by a 0.7% rise in nonagricultural export prices which have turned up versus last year after a 6.6% y/y decline as of July. Agricultural export prices jumped 3.7% (0.6% 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, %) November October September Y/Y 2008 2007 2006
Import - All Commodities 1.7 0.8 0.2 3 .7 11.5 4.2 4.9
  Petroleum 6.2 2.9 -0.6 35.5 37.7 11.6 20.6
  Nonpetroleum 0.7 0.6 0.3 -1.6 5.3 2.7 1.7
Export - All Commodities 0.8 0.2 -0.2 0.6 6.0 4.9 3.6
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