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Economy in Brief

U.S. Import Price Gains Continue Strong
by Tom Moeller February 17, 2010

Higher oil prices and the lower dollar have been the primary factors behind the movement in import prices this past year. Just for January, a 1.4% rise in prices was nearly the strongest since last June and beat Consensus expectations for a 1.0% gain.

Petroleum prices jumped 4.8% last month and they have roughly doubled since last January. This month, the strength in Brent crude oil prices tapered off with a decline to an average $72.91 after reaching a daily high near $80 per barrel early in January.

Conversely the lower value of the U.S. dollar has helped lift non-oil import prices. A 0.6% January increase was near the elevated gains during the prior four months. Since their low last March non-oil import prices have risen 2.4% after a 5.3% decline during the prior twelve months. (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.) 

Prices for nonauto consumer goods rose for the first month in the last three but the slight y/y increase is improved from the deflation as of last Fall. Prices for durable consumer goods increased a firm 0.6% to lift the y/y increase to 0.6% from a 1.1% decline as of last fall. Capital goods also slipped m/m but the pace of price deflation has slowed.

Total export prices increased 0.8% (3.4% y/y) reflecting a 1.4% (4.5% y/y) increase in agricultural export prices and a 0.7% gain (3.3% y/y) in non-agricultural prices. These declines reversed just some of the strength through 2008

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

Is the International Role of the Dollar Changing? from the Federal Reserve Bank of New York can be found here

Import/Export Prices (NSA, %) January December November Y/Y 2009 2008 2007
Import - All Commodities 1.4 0.2 1.5 11.5 -11.5 11.5 4.2
  Petroleum 4.8 -1.4 5.4 95.5 -36.0 37.7 11.6
  Nonpetroleum 0.6 0.5 0.6 1.2 -4.2 5.3 2.7
Export - All Commodities 0.8 0.6 0.8 3.4 -4.6 6.0 4.9
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